"Bonfire of the Quangos" event review - #Bonfireofthequangos

I attended a panel discussion organised by Editorial Intelligence yesterday evening where the topic was Quangos (Quasi autonomous non-governmental organisations) and what if anything we need to do about their proliferation.

On the panel chaired by Martin Bright of The Spectator were Neil O'Brien from Policy Exchange, Peter Grant from the Cass Business School, Conservative MP Douglas Carswell (a renowned Quango reform advocate who I recently interviewed for this blog), Chief Constable Peter Neyroud the CEO of the National Policing Improvement Agency (a Quango) and Phillip Stephens Chief Political Commentator for the Financial Times.

Here is a synopsis of what each covered in their opening speeches.

Neil O'Brien suggested that the figure spent on Quangos is anywhere between £32 billion and £64 billion depending on how you count it. He suggested it is easy to mock organisations like the "Potato Council" (which he said was his own personal favourite Quango to mock!) but there are some Quangos that do an important job. He also thinks that the public don't accept that government needs to do everything currently within its remit and dislike of Quangos is a manifestation of this. He said it is notable that many Prime Ministers including Gordon Brown and Margaret Thatcher have pledged to get reduce Quangos and failed. The problem as he sees it is that as a country we like the sound of independent bodies but their creation reduces accountability and gives political insulation to ministers. He sees that there are 4 tests for Quangos:

1) Do we want this Quango at all? It is not always that easy though and he suggested that the way government tries to prune when it does it to chop fingers and toes off rather than go on a diet.

2) When are Quangos right?

3) Is this Quango value for money? For example he said that there are 68 Quangos whose CEOs earn more than the Prime Minister.

4) Is there too much proliferation and duplication. He offered the example of the Potato Council encouraging people to eat more potatoes whilst simultaneously other Quangos are trying to get us to eat less in order to lose weight.

Peter Grant said that one of the problems is that Quangos often expand well beyond their original remit and more need to be brought back to their original purpose. He thinks that for example the Parole Board and the Lottery Distributors could and should be totally independent of government. Some Quango bodies appear to think they should kowtow to every whim of government whereas others get too political and oppose the government or even try to create policy themselves. Like Neil, he also thinks that value for money is an issue and gave as an example the fact that the lottery distributors are now three times as big as they were originally with no significant improvement. Peter said there are 3 questions that should be asked:

1) What is the function of this Quango?

2) Can an intermediary body add value?

3) If the answer to 1 and 2 is yes then what government functions can assist? In his view this may not always mean Quangos although he is not sure that we have the correct infrastructure in place to facilitate alternatives.

Douglas Carswell made a number of rapid-fire points initially:

• Sometimes there can be good Quangos (this was in response to a direct question from Martin Bright)
• The number of Quangos has increased hugely
• Tony Blair said he would consign them to the "dustbin of history" and failed
• It has become a political cliche to say there will be a bonfire of the Quangos (first coined by Michael Heseltine) but why?
• You cannot rely on executive fiat or government to curtail itself
• The loss of faith in our politicians is down to lack of accountability
• There are so many Quangos that we are running out of letters, e.g. there are now two FSAs
• The Taxpayers' Alliance claim that there are between 2,000 and 2,500 Quangos (the higher figure includes Primary Care Trusts).
• There is an inherent "leftlist bias" amongst Quangos
• There is no such thing as a "disinterested expert" and someone who has spent their entire life in a specfic field is the last person who should be put in charge of it as sometimes happens with Quangos

Douglas' solutions are taken from his book "The Plan".

Firstly he suggests making Quangos justify themselves to the legislature, but only after reforms to the Commons to make the legislature truly independent. They would need to have confirmation hearings and have their budgets agreed by select committees with the chairman elected by secret ballot.

Secondly he thinks that with properly devolved local powers (e.g. elected sheriffs) the need for Quangos to administer a lot of what they do now will dissipate and in some cases vanish.

Finally, he suggested that there would be a lot of resistence to his proposals and that Quangos should be banned from doing what he perceives as "lobbying government using taxpayers' money".

Peter Neyroud said that in forming the NPIA they actually got rid of lots of other Police Quangos in the process. He gave an example that one thing they have done is reduce the amount of different ways that fingerprints were processed from 43 to 1 and hence reduced the average amount of time it takes from 17 days to 24 hours. They cut costs in half by rationalising; people, process and technological change all need to be managed together. In response to Douglas' suggestion he said he would welcome the opportunity to justify his budget in an open accountable forum. In order to have trust he thinks that Quangos need to be transparent. He also thinks that given the current financial situation, now is the right time to be having this debate.

Phillip Stephens thinks that in these debates about Qunagos there is often a lot more heat than light. They exist because politicians want them to and when you look behind them, there is almost always a politician who wanted it created for some reason. He thinks there are 3 types of Quangos:

1) Must haves: e.g. Competition Commission, Nuclear Safety Board etc.

2) Nice to haves: e.g. NICE, Audit Commission etc.

3) Discretionary: e.g. Regional Development Agencies

He thinks it is a good idea for an incoming government to review all Quangos to decide how and if they are needed. he sympathises with Douglas' ideas but suggested that the Bank of England did report to a select committee and this did not prevent the financial crisis. He is also slightly worried by David Cameron's proposals which include creating a new Quango for Fiscal Responsibility.

There were then lots of questions from the audience (some very good) and answers from the panel but generally from what I could discern the answers were variations on the same points the panelists had already made.

I did manage to ask a couple of questions myself. I wanted to know if Douglas had any alternatives to the radical ideas in "The Plan" given that they many not be implemented for many years (or ever) and trying to get a grip on Quangos seems to perhaps be a bit more urgent however he did not really address my question. I also asked if there was a way that we could do something to help avoid politicians from having the knee-jerk response to create a Quango when the heat is on but again nobody seemed to have much of an answer to that. Ultimately government is supreme and if they want to create Quangos there is little that can be done to constrain them.

My summary of the debate is that everyone accepts there is a need for Quangos but there are differing views on which ones are needed and not. It is a very difficult issue and trying to generalise across hundreds (or depending who you listen to possibly thousands) of bodies like this is an invidious task. Apart from some perhaps easy targets (The Potato Council for example) there will be all sorts of reasons why individual Quangos exist and trying to get rid of them will be very tough. There could also be all sorts of unintended consequences and the role of government itself could get more bloated as a result.

Some of Douglas Carswell's radical ideas may have some effect (if they ever get implemented) but I think Phillip's point about the Bank of England is instructive and it would not be a panacea. I also think that MPs would find it difficult to scrutinise all the functions and budgets of all Quangos in enough detail to be able to make a good judgement call in all cases. They do have other things to do!

It was an important and interesting debate to have which I enjoyed and one that I suspect will be had over and over again in the coming years but it is clear that there is certainly no silver bullet.

UPDATE: There is a podcast of the event now available here. If you are interested, my question is from about 49:30 for around 2 minutes.