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The QUANGO Question

Updated Sunday, 8th November 2009

Malcolm Prowle asks if there's as much room to cut QUANGOS as some politicians might hope.

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Quasi-autonomous non-Governmental Organisations (QUANGOS) have been part of the UK public sector for many decades and there are often robust political and managerial debates about the usefulness (or otherwise) of these public bodies. This has been brought into focus recently by the atrocious state of Government finances in the UK and the need for the next Government (whoever it may be) to make real terms reductions of public expenditure in excess of £100 billion.

Not surprisingly when there are threats to front line public services such as schools and hospitals many will question whether we really need the large range of QUANGOS which currently exist and also whether we can afford them in the current economic and fiscal climate.

A well-researched document recently produced by the Taxpayers Alliance claimed that in the UK there were a total of 1162 QUANGOS and other agencies which cost the taxpayer a total of £63.5 billion. These figures seem to chime with similar figures used by David Cameron in a recent speech but differ markedly from other claims which put total QUANGO expenditure at £14 billion.

This brings us to the first issue of what do we really mean by a QUANGO. For example, the figure of £124 billion includes in its list of QUANGOS all of the NHS Trusts in the UK which deliver hospital and community services. Few would regard NHS Trusts as being QUANGOS in the usual meaning of the world. Even the TPA report includes in its list of QUANGOS the following organisations:-

  • The British Museum
  • The BBC
  • Kew Gardens
  • The National Library for Wales

I am not sure many people would regard since high profile and well known organisations as QUANGOS.

Perhaps QUANGOS can be considered in four main groups:-

  • Service providers – some QUANGOS such as the British Museum provide services directly to the general public.
  • Funders – some QUANGOS distribute public funds to relevant external organisations. Thus the Arts Councils distribute funds to arts projects and the Higher education Funding Council for England (HEFCE) distributes funds to universities for teaching and research. So it is misleading (as the TPA report does) to claim that HEFCE spends £7billion per annum. The vast bulk of that money, with the exception of £20million for internal administrative costs, is distributed to universities for teaching and research. Also in this category might be included Regional Development Agencies.
  • Regulators and Inspectors – some QUANGOS are charged with inspecting and regulating public sector service providers. Thus OFSTED inspects schools and the Healthcare commission inspects hospitals. The Audit Commission audits and inspects a range of public bodies. Also in this category might be included QUANGOS such as the Equalities commission.
  • Advisors – there are a myriad of bodies of varying size which provide advisory services to various parts of Government.

There are many questions which will continue to be asked about QUANGOS. These include:-

  • What benefit do they actually produce? For example, have schools really improved as a result of OFSTED? Have inequalities really reduced as a consequence of the Equalities Commission? The evidence is often thin. Also the activities of such inspection QUANGOS often place great burdens on the public bodies being inspected.
  • Could their work be done by other existing organisations? For example, many of the roles of the Learning and Skills Council (LSC) in funding post-16 education used to be done by local authorities. Also, much economic work is done by local authorities as well as RDAs. Do we therefore need these QUANGOS when local authorities might do the same work for less?
  • What public accountability is there for the work of QUANGOS? The Boards of QUANGOS are not elected but appointed by Ministers who seem to closely control what they do in some detail.
  • Why are so many QUANGOS based in London when their wok could be just as easily done in other parts of the UK?
  • Are there too many QUANGOS? For example do we need a QUANGO to fund higher education (HEFCE) and a QUANGO to fund post 16 education (LSC)?
  • Are QUANGOS just devices for Ministers to reduce civil service head count and to avoid direct responsibility?

Overall, the future of QUANGOS probably depends on how much time and energy Ministers can devote to the issue given the vast problems which will face the next Government. Some savings can probably be squeezed out of the QUANGO system but it is probably much less than currently imagined.

Find out more

Malcolm appeared on BBC One's The Politics Show talking about QUANGOs on November 8th 2009.

Get under the skin of questions of private and public finance with The Open University Business School.

 

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