Too many Public bodies, including quangos, fail accountability tests and Nolan principles

Poor governance compounds systemic problems


This week the Commons  had a debate on reforming itself.. Some tinkering at the margins, and pruning were the order of the day.  But it comes at a crucial time, and against the backdrop of previous half hearted reform efforts.  The House of Commons is no longer an effective partner in governance. It has been neutered. In its primary function, to hold the Executive to account, it is demonstrably failing. The Guardian opined in a Leader this week ‘Parliamentary autonomy over committees and business is crucial to redressing the balance between the legislature and the executive.’ Labour MP Natascha Engel wrote in the Times of …  ‘a total breakdown of understanding and complete lack of real communication between electors and elected means that we have a full-blown crisis of democracy on our hands.’ And some.  Select Committee’s whose function is to hold Departments to account, including  how taxpayers money is spent are, essentially, controlled by the Government and do not begin to have the scope, powers or will (look at the poor level of MPs attendance at committee hearings with many committees barely mustering a quorum)   to keep our Departments and their errant offspring, the quangos, in control or  remotely accountable. Quangos, by and large, choose their own targets and are not held regularly accountable for failing to meet even these. An LGA report on quangos said “Unlike councils, hospitals, and Whitehall departments, (Whitehall Departments?) which all face regular inspections, quangos are rarely subject to any kind of performance appraisal or inspection.”. Many then conceal the total remuneration, entitlements, expenses and bonuses of their key staff, from public scrutiny. Research by the LGA found that nearly one in every seven hundred quango staff earn in excess of £100,000. Ten members of staff in the Youth Justice Board, a relatively small quango, with a reputation for missing more targets than it meets, earn over £100,000 a year and until recently its chief information officer trousered an  eye-watering £320,000 a year (he moved to another department after this was made public).

Though grant funded entirely, or in part, they all have different rules for public disclosure, because they have different legal status’ .Some are subject to the Freedom of Information, some not. A charity, such as the SSAT, looks like a quango, certainly behaves like one and receives directly   or recycles, large amounts of taxpayers’ money, but is a registered a charity, as are the academies which it supports. This means they are not subject to Freedom of Information requirements and therefore full public scrutiny. The fact is we   don’t know whether they deliver value for money. We don’t even know what exams Academy pupils take in some instances.  We certainly  are under no obligation to give the SSAT the benefit of the doubt.  We do know that many quangos harm competition, using taxpayers’ money and implicit government guarantees, along with privileged information, to undercut and steal an advantage on private sector bidders in competition for contracts and are also awarded some contracts without them being put out to open tender, which clearly mitigates against securing value for money.

The Government can ignore Commons Select Committee reports and frequently do.  Parliament is also supposed to protect taxpayers’ money and to ensure public agencies spend our money wisely. In this too, it largely fails, and has lost much of its moral authority in the wake of the expenses scandal. Other scrutinizers such as the National Audit office have been criticized for getting too close to those it is supposed to monitor (wining and dining them in smart London restaurants or accepting hospitality from them) and for being cavalier with its own expenses. It is geared up in any case to report on projects historically-so we have  detailed accounts of historical  failure, with accompanying chronology  but are seriously deficient in   knowing what’s going on in current   government   projects. Both Parliament and the once proud, independent civil service have been reduced to executing centrally prescribed  diktats. We have a overly centralised political system with little subsidiarity, ie getting decision-making closest to those most affected by it. Local government , with   relatively little control over funding, is disempowered.

Cabinet decision-making has been replaced by cabal  decision-making in which a small, very small in fact,  mainly  unelected   group around the Prime Minister makes key decisions , even in matters of war . The limitations of Blairs  ‘sofa style government’ have been exposed by the Chilcot inquiry, and nothing much has changed  in the Brown administration. . The exit of talented Ministers has much to do with Browns style of Government with the likes of Lord Mandelson and Ed Balls dominant influencers. Other Cabinet Ministers feel excluded, particularly the leading reformists.  Decision-making   is prone to errors at the best of times   but in the absence of institutions around decision-makers to guide, check and scrutinise what they decide, poor and inconsistent decision-making is all but guaranteed. The system lacks transparency and accountability and the result is a democratic deficit, a failure to pursue, in too many instances,   ‘Public Value ‘by public servants and huge wastage of taxpayers money. The electorate feels alienated and disempowered, unsurprising given that its true. This much we know.

What to do about it? For starters all public servants should reacquaint themselves with the Nolan principles then apply them in their daily work. Starting with the first one- ‘Holders of public office should take decisions solely in terms of the public interest. They should not do so in order to gain financial or other material benefits for themselves, their family, or their friends.’

Parliament needs urgent reform, we need a return to Cabinet Government and collective responsibility, we need a truly independent civil service and to stop civil servants becoming servants of the political party that is in power .The division is now dangerously blurred.  It is hard not t0 argue that we have an overarching need -major constitutional reforms.

But we need more. We need our public services to be more open, accessible and reactive to end users’ demands. We need quangos to demonstrate that they provide value for money and Public Value and have a positive effect on front line services, and to explain why their services can’t be delivered through the private and not for profit sectors, the latter including co-operatives and social enterprises. At present no taxpayer feels they have a stake in quangos and if they fail to perform there is no redress, a recipe for complacency and inefficiency. We can vote out Councillors and MPs in elections if we think they are not spending money wisely but not quangocrats.  It is difficult to know what the 791 quangos do with £43.2 billion of public money, Many quangos could not demonstrate their cost effectiveness. So get rid of them. Some, those involved in regulation are important, indeed essential, as part on the accountability framework and should be kept. But for many others, including those who argue their case on paper convincingly, why not see if they are needed by placing them up for sale. If there is a demand for their services and a market they will attract buyers. Some might be attractive to say Serco, Capita, Tribal VT, even not for profits.  I suspect that many wont be that interested, once due diligence has taken place. They simply wouldn’t be attractive economic propositions. Top heavy, front loaded, too expensive, inflated salaries and pensions to cover and with huge, up to now, hidden liabilities.

We need to hold all our public servants much more accountable for what they do, and how they do it, for their failings and for the way they spend our money and reward themselves. We pride ourselves in the claim that we are not corrupt. But the lack of transparency invites corruption and there is growing anecdotal evidence that low level corruption exists, evidenced in extravagant use of expenses to supplement salaries, highly dubious bonus payments, contract awards that fail the most basic value for money and transparency  tests, appointments that are based  not on merit but political contacts  , and so on. Some MPs and Peers we know have abused public funds. Some politicized civil servants and quangocrats set poor examples too. We joke about Nicholas Winterton’s remarks about the need to travel first class and the ‘ them and us’ mindset  but his  keen sense of entitlement  and self-regard   is deeply embedded in  some areas of  our public service culture.  (and he is one of the better constituency MPs and a member of the speakers panel to boot)). Some senior public servants agree that essential reforms in order to protect the good reputation of the civil service are overdue. As this Government trumpets equality, guess who the new elite are-the untouchables. They populate the higher echelons of our public service, in Government departments and the burgeoning, largely unaccountable quangocracy. Don’t get me wrong, we need some quangos. But for those that can demonstrate their importance, they need to be streamlined, lean, transparent and accountable.

As the ship of state heads, with full sail and the wind behind it, debating whether it needs a change of captain and crew, towards bankruptcy, we need urgently to rethink our governance and the role of the state. We simply can’t afford the size of the state we have now and we will need to get more from less in future.  All parties know that cuts and structural reforms have to be made, as do economists, the argument is now not whether but when and how. We must use this opportunity for fundamental reforms, to reduce our deficit, to reform governance and transform the public sector. As yet, despite this awareness, no party seems to have  yet fully  grasped the nettle, though the Liberal Democrats, (think Vincent Cable comment on economic and financial reforms and David Laws on quangos ), and the  Tories (think David Cameron’s speech on Quangos, Gove’s comments on education quangos  last year   and David Willets, whose new book  exposes  the fact that  current public Pension and Healthcare costs are unsustainable,) are sending out some positive, if sometimes conflicting signals. The Government too has talked of reform taking a step towards a slimmer State in its White Paper, Putting the Frontline First: Smarter Government. It proposed abolishing 123 quangos. But in reality this amounts to minor pruning and appears reactive rather than visionary, lacking ambition or, seemingly, an understanding of the magnitude of the challenges we face. As Matthew Flinders, Professor of Parliamentary Government and Governance at the University of Sheffield has said ,politicians should aim to create a smarter State in which more streamlined, arm’s-length quangos operate within a clear and accountable system.  We need to map quangoland, he says  and establish who wields what power — and then clarify who should be responsible for what but this requires leadership and for politicians to top hiding behind quangos when awkward issues flare up.  But quangos are just one of the challenges facing politicians.

In short we need  constitutional and governance  reforms ,while  making  our public servants and services more transparent, accountable and dedicated to the single minded pursuit and delivery of   public value. Otherwise electors will continue to feel disengaged, disenfranchised and disillusioned, which is not healthy for our democracy.


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