Friday, 8 October 2010

Bonfire of the Quangos

Those public bodies known as “Quangos” – the acronym for “Quasi-autonomous non-governmental organisations” – are no longer flavour of the month within government circles even though many of them have important legal and/or regulatory roles.   There is to be a “Bonfire of the Quangos”.  The death warrants to begin this “auto da fé ” will be issued shortly.  However, when the dismantling costs are factored in, the amount of money to be saved in the early years is not as big as many would like or perhaps imagine - The Guardian 7th October 2010 – “Government’s ‘bonfire of the quangos’ plan will cost as much as it saves”.   The "dismantling costs" relate to liabilities for pensions, redundancies and rental contracts.

The Guardian has also set down a list of those quangos which are either to be axed or reviewed – here

The government is pressing ahead with a Superannuation Bill which will place a cap on payments under the Civil Service Compensation Scheme - see Cabinet Officethe Bill and Explanatory Notes.

Under review:

Many might be surprised that some of the bodies in the list even exist – e.g. why we  have an “Advisory Committee on Conscientious Objection” even if, for some individuals serving in the military, it may prove to be necessary – see here?   Other bodies listed for review include some which surely perform necessary functions: the Child Maintenance and Enforcement Commission; the Criminal Injuries Compensation Authority; the Law Commission and the Equality and Human Rights Commission.

To be abolished:

The abolition list includes the Audit Commission; the Human Fertilisation and Embryology Authority; Human Tissue Authority; Security Industry Authority; the Legal Services Commission; the Standards Board for England and Wales.  Many (arguably most) of these perform important functions which will still have to be performed somewhere.  Obviously, if the task remains then so do some of the costs.  


Bodies earmarked for merger include Advisory Committees on Justices of the Peace; the Crown Prosecution Service; various tribunals; the Gambling Commission; the National Lottery Commission; OFCOM etc.   Details of the mergers are yet to be announced but there are significant costs involved in mergers.

Is there a case for a more measured approach to reducing this large array of public bodies?   Is there a danger that the surgery will cause further difficult problems which will then have to be rectified at great costs?  There are certainly considerable risks in a too hasty wielding of the scalpel.  Just one final thought:  the reason for creating a quango has often been a Minister's desire to distance himself from the day-to-day issues for which he might be held accountable if the task remained in his department.  Remember the Michael Howard and Derek Lewis row?

See "Read before burning ...." - Institute for Government   Looks at how the accountability and effectiveness of quangos might be improved.  For a view that "Big Government" is here to stay despite the Spending Review - see here.


  1. Pensions liabilities are a sunk cost, and therefore irrelevant as a 'winding up cost'. If the Quangos are not cut they will merely continue to accrue, so in fact, by cutting quangos now you avoid additional future costs.

    The problem with quangos, to which you allude, is lack of accountability. If it is funded wholly (or even mostly) from the public purse it should be as accountable to the public as a ministry of state.

  2. The distancing of Ministers from their responsabilities requires the abolition of Quango's set up ! Ministers should be accountable for the decisions implemented in the governments name. why else would a minister require 'special advisors' ?

    As to the Child Support and Enforcement agency being an essential service - it was ill conceived from the outset and costs more to run than it collects ! The earlier system of court assigned support agreements (where both sides are represented) worked much better and more efficiently. It also tied child contact to payment in a small degree in that one could not go back to court for 'agreed' maintenance if one was breaking the 'contact' side of the agreement. Since the (old) CSA - contact orders were flouted with no corresponding government stick to beat people with ! As the beatings were mainly upon men - Barmy Harmy was orgasmic ! This did not make it good or useful !

  3. @ John - yes, I see this argument. You may be interested in the following article:

    Quangos – Incineration can be so costly. Here John Hanratty of Pinsent Masons examines the pension cost implications on closing down these bodies.

    In terms of accountability, much depends on the enabling legislation. However, the establishement of a quango has usually had the effect (no doubt intended) of putting day-to-day decision-making a step removed from the Minister who can then say (as did Michael Howard) that he is responsible just for the policy directions given to the quango.

    As public bodies, quangos are judicially reviewable and that adds some accountability but this is an expensive process. Also, European Directives can be enforced against most quangos since they are "emanations of the State"

    @ Anonymous - over the last 30 or more years, it has suited politicians of all colours to establishe quangos so that they can avoid the awkward responsibility of day-to-day decisions. They have also been able to argue that they have got rid of "civil servants". Technically, they have done but they have created a vast army of public servants (quangoistas) with similar (or better) emoluments.

    Having said all this, I do believe that some of these bodies perform functions which are necessary and therefore will have to be performed by someone else. The tasks will not necessarily go away.

  4. A further interesting article - with links - is to be found on the Institute for Government website - see here. Very useful discussion of the points to look our for when closing down these bodies.