27 August 2012

The British Government’s hunt for quangos has led to the demise of more than 100 over the last 18 months. A Cabinet Office Minister report last week was that by 2015,  savings will be worth at least £1.4bn  The down side is that no savings have yet been made and the estimated cost of the cull, at about £900m, is higher than anticipated.

The Minister’s aim is to abolish 204 agencies, ultimately saving at least £2.6bn – although an Audit Office report this year indicated that Departments had not yet explained precisely how these savings would be achieved.

The British Prime Minister has referred to the abolition or merger of many of the 900 agencies that existed at the last general election as a “bonfire of the quangos”.

The Public Bodies Act has empowered the changes, with 106 public bodies now gone from the machinery of government and more than 150 bodies now merged into fewer than 70.

But the Cabinet Office now says that it expects the transition costs to be “between £600m and £900m”. The Minister said the £2.6bn target was the equivalent of £150 saved for every working household in the country.

The Government has been critical of the “…bloated quangocracy that had spiralled out of control. Not only were these unaccountable bodies costing the taxpayer billions, but they were duplicating bureaucracy,”  Apparently the planned closures and mergers will not be the end.  The Minister has said that the Government “….will continue to review all remaining quangos to ensure that never again will we end up with so many of these vast bureaucratic and unaccountable bodies.”

The Guardian points out that it takes two to make the system work efficiently and effectively. The relationship between government and its arm’s length bodies is fundamental to this. What is required as a focus, not simply on the mechanisms for reducing costs, but also on strengthening the relationship between quangos and departments.

The report “It takes two” suggests a framework for such improvements in relationships.   It cannot be achieved by the Government alone.  It will take two to deliver the outcomes and cost savings expected by the Ministers.

And contemporaneously, in Australia the issue of a fourth or integrity branch of government encompassing a number of arms-length agencies is getting a reprise.  This group includes a number of quangos, the equivalents of those being affected by the changes in the UK.