Public Administration Committee says that reform of quangos has been a lost opportunity and the Bill is poorly drafted

But reforms on-going


Francis Maude, the Cabinet Office Minister, has been driving through reforms in the delivery of public services to drive down costs,  to improve efficiency,  deliver value for money, streamline public  procurement and to encourage greater  transparency and accountability. He also wants to see, at the end of this process, a greater role for small and medium sized enterprises in public service delivery.   Reforms have included a partial cull of the Quangocracy, though  more barbecue, say critics. than the widely anticipated bonfire. Although the process of reform is on-going organisations such as the British Council , the TDA  and NCSL (the SSAT now  has less public funding to manage but is still competing unfairly with non-subsidised private and not for profit operators in the markets here and abroad)  have emerged largely unscathed from the review although  critics want these organisations to be cut down to size , made more transparent and accountable and for them to demonstrate, against clear  performance benchmarks, that they deliver value for money for taxpayers  and that the services they provide cannot be provided better and cheaper by the private  and  not for profit providers ,or indeed social enterprises.

The Public Administration Committee has been looking at reforms affecting quangos and has just published a report ‘ Smaller Government: Shrinking the Quango State . The verdict is  that the Government’s “Bonfire of the Quangos” has been “poorly managed” resulting in badly drafted legislation that won’t deliver significant cost savings or improved accountability. Bernard Jenkin, the committee’s Conservative chairman, says “the whole process was rushed and poorly handled and should have been thought through a lot more”. Pre-election promises from the Conservatives  about cuts to costly bureaucracy “created a false expectation that the review would deliver greater savings” than appear likely. And to make meaningful savings, the government needs to examine not just how the quangos operate, but what they exist to do. In many cases, the committee argues, functions could have been transferred to charities or mutuals. “This was a fantastic opportunity to help build the big society and save money at the same time,” Mr Jenkin says. “But it has been botched.”

The Committee report claims that the Public Bodies Reform Bill currently with the Lords  aimed at delivering  these reforms was  badly drafted. And it  promised to issue a further detailed report on the Bill once the Lords have finished their scrutiny. The report concluded “ The Government should have reassessed what function public bodies are needed to perform and transferred many more of these activities to charities and mutuals. Doing so would have helped explain more clearly its vision for a Big Society, giving these organisations the ability to provide more government services. It should also have used the review to get control of some activities of public bodies that provide questionable benefit to the taxpayer, most notably the use of public funds for lobbying and public relations campaigns.”  The  Committee added  that ‘Deciding which bodies can be moved into the private and voluntary sector should form only part of the Government’s review. It should also reconsider what activities public bodies should continue to engage in. Some public bodies have allowed their remit to increase over the years and there is a need to refocus them on their core functions. Identifying the essential activities of these bodies will both make them more efficient and reduce cost. This principle must be embedded in future reviews. (Paragraph 114)

The Committee intends to bring forward proposals to strengthen the  Select Committees’ role in scrutinising changes to public bodies in its future report on the detail of the Public Bodies Reform Bill.

The Committee though  has failed to address the issue of  the unfair activities of quangos in the markets  both here and abroad which disadvantage non-subsidised private and not for profit providers. In short,  Quangos use taxpayers money to  cross subsidise their operations  in order to under cut  other competitors bids for contracts  and quangos, such as the SSAT and British Council,  are frequently awarded contracts that are not put out to open  tender which  apart from being unfair, cannot ensure value for money for taxpayers. Francis Maude has, though,  been made aware of providers concerns  and their  calls for urgent  reform.

Mr Maude  has rejected the Committees  criticism, promising to “see the reforms through”. The Committee welcomed the Minister’s comments which indicate that future reviews will include considerations about efficiency and value for money of quangos along with his assurances that  he would be able to devise a more cost-effective review system than previous efforts.

Reforms are on-going  driven by the Cabinet Office.



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