Smarter rationalisation

December 08, 2009 11:34 AM

“We will also merge or abolish 123 government arms length bodies with the remainder subjected to greater oversight with a view to save a further £500 million a year."

So said Gordon Brown yesterday. And it sounds great. As did the rest of the speech, launching the paper Putting the Front Line First: Smarter Government.

But as always, delve into the paper a little closely, examine in detail the Government’s plans for ‘arms length bodies’ (read quangos), and it’s all rather disappointing. For a start, let’s put the plans in context. In 2007-08 there were 1,148 ‘arms length bodies’ in the UK (not, as Liam Byrne claimed, 790, which ignores various types of body). Total public spending through these organisations was in excess of £90 billion. (For full details, see ACA to YJB: A Guide the UK’s Semi-Autonomous Public Bodies.) Last year, in 2008-09, mergers of various bodies are likely to have brought the total number of bodies down, but spending through them (like every year before it) will have risen.

So the first stage of the Government’s quango rationalisation begins with around 10 per cent of the total number. The TPA has been calling for a proper official audit and rationalisation for over two years now, so these plans are welcome. But in terms of the deficit, and spending, the Government has ducked any difficult choices. For the chop are 16 Agricultural Dwelling House Advisory Committees and 15 Agricultural Wages Committees, a positive development, but neither of these costs the taxpayer very much money (it’s unlikely to be anywhere near even £1 million). Similarly, the inexpensive Justices of the Peace boards, of which there are 101, will be slimmed down to 49. There would also be a merger between the Sentencing Guidelines Council and Sentencing Advisory Panel into a single Sentencing Council, and between the Postgraduate Medical Education and Training Board with the General Medical Council. Perhaps most importantly in terms of cost, there is also mention of reducing the number of publicly funded skills bodies. Again, this is very welcome, but the plans are very light on detail. For instance, will this development involve mergers so that there are fewer, larger skills bodies, or outright abolitions?

Perhaps the most revealing thing about Smarter Government was its tacit admission of cluelessness.  Thankfully, the report yesterday abandoned the ridiculous assertion that only NDPBs are relevant to these discussions about quangos. In co-opting the Department of Health’s terminology of ‘arms length bodies’, Liam Byrne is moving towards a more sensible definition (such as ours, Semi-Autonomous Public Bodies), and as a result a real debate is possible.

Beyond the definition, the report also adopted a more realistic assessment of the spending that goes through these bodies, at approximately £80bn. In Public Bodies 2008 the Cabinet Office calculated that the Government funded Non-Departmental Public Bodies to the tune of £34.5bn in 2007-08, which is the figure for ‘quangos’ that the Government has stuck persistently to over the past couple of years. At last that fiction appears to have come to an end.

The TaxPayers’ Alliance’s comprehensive survey of the semi-autonomous state showed that Government funding of SAPBs was over £90bn. But whether £80 billion or £90 billion, the fact is that the bodies identified in Smarter Government will do next to nothing to help correct the deficit, welcome though rationalisation is. One is left with the impression that cutting an impressive-sounding number of bodies has been the target, as big savings certainly isn’t. Powerful vested interests, desperate to hang onto their Government hand outs, clearly prevailed over good sense in the Cabinet Office.

Finally, Smarter Government also highlights ways to save £500 million in the future by introducing more stringent frameworks for SAPBs. How this figure was worked out is not clear, but the methods that will be employed to achieve it are. Their main proposal is to:

“Establish a more rigorous process for setting up ALBs, for example by requiring any minister proposing a new body to publish a full assessment of why the body is needed and set out why an ALB is the most effective delivery mechanism.”

What’s perhaps most amazing about this is the implication it gives that ministers haven’t had to give a robust justification for establishing an SAPB before; disgraceful, but somehow unsurprising.

Once SAPBs are set up, they are not properly assessed either. While notionally accountable to a parliament, in reality this is exercised all too infrequently. Indeed the report’s main example of a department ‘actively reviewing’ SAPBs cites the Department of Health’s 2004 review. That’s five years ago, and it should be noted that aspects of that review are still ongoing. Given how stubbornly they survive, many SAPBs seem to have an immortal existence from birth.

On a more positive note, the report calls for implementing sunset clauses at a SAPB’s inception. As they grow they tend to accrue broader, more diverse remits than was originally intended, so if they come under review after a specified time then hopefully this could go some way to prevent mission creep. But annual reviews must happen concomitantly with any sunset clause, to ensure that SAPBs are performing to the standard required and offering value-for-money.

Any proposal that will rationalise policy making has to be welcome given the enormity of the semi-autonomous sector. The Government’s proposals yesterday, however, should in no way be seen as a move to help ease the fiscal crisis, (or in truth, achieve any real rationalisation). The numbers may look impressive, but a real debate is needed over quangos, whether we call them SAPBS, NDPBs or arms length bodies. Semantics must not be allowed to blur the picture. A frank assessment of the true extent of the semi-autonomous sector will go to the heart of what we expect from the state, so that genuine rationalisation can occur.

“We will also merge or abolish 123 government arms length bodies with the remainder subjected to greater oversight with a view to save a further £500 million a year."

So said Gordon Brown yesterday. And it sounds great. As did the rest of the speech, launching the paper Putting the Front Line First: Smarter Government.

But as always, delve into the paper a little closely, examine in detail the Government’s plans for ‘arms length bodies’ (read quangos), and it’s all rather disappointing. For a start, let’s put the plans in context. In 2007-08 there were 1,148 ‘arms length bodies’ in the UK (not, as Liam Byrne claimed, 790, which ignores various types of body). Total public spending through these organisations was in excess of £90 billion. (For full details, see ACA to YJB: A Guide the UK’s Semi-Autonomous Public Bodies.) Last year, in 2008-09, mergers of various bodies are likely to have brought the total number of bodies down, but spending through them (like every year before it) will have risen.

So the first stage of the Government’s quango rationalisation begins with around 10 per cent of the total number. The TPA has been calling for a proper official audit and rationalisation for over two years now, so these plans are welcome. But in terms of the deficit, and spending, the Government has ducked any difficult choices. For the chop are 16 Agricultural Dwelling House Advisory Committees and 15 Agricultural Wages Committees, a positive development, but neither of these costs the taxpayer very much money (it’s unlikely to be anywhere near even £1 million). Similarly, the inexpensive Justices of the Peace boards, of which there are 101, will be slimmed down to 49. There would also be a merger between the Sentencing Guidelines Council and Sentencing Advisory Panel into a single Sentencing Council, and between the Postgraduate Medical Education and Training Board with the General Medical Council. Perhaps most importantly in terms of cost, there is also mention of reducing the number of publicly funded skills bodies. Again, this is very welcome, but the plans are very light on detail. For instance, will this development involve mergers so that there are fewer, larger skills bodies, or outright abolitions?

Perhaps the most revealing thing about Smarter Government was its tacit admission of cluelessness.  Thankfully, the report yesterday abandoned the ridiculous assertion that only NDPBs are relevant to these discussions about quangos. In co-opting the Department of Health’s terminology of ‘arms length bodies’, Liam Byrne is moving towards a more sensible definition (such as ours, Semi-Autonomous Public Bodies), and as a result a real debate is possible.

Beyond the definition, the report also adopted a more realistic assessment of the spending that goes through these bodies, at approximately £80bn. In Public Bodies 2008 the Cabinet Office calculated that the Government funded Non-Departmental Public Bodies to the tune of £34.5bn in 2007-08, which is the figure for ‘quangos’ that the Government has stuck persistently to over the past couple of years. At last that fiction appears to have come to an end.

The TaxPayers’ Alliance’s comprehensive survey of the semi-autonomous state showed that Government funding of SAPBs was over £90bn. But whether £80 billion or £90 billion, the fact is that the bodies identified in Smarter Government will do next to nothing to help correct the deficit, welcome though rationalisation is. One is left with the impression that cutting an impressive-sounding number of bodies has been the target, as big savings certainly isn’t. Powerful vested interests, desperate to hang onto their Government hand outs, clearly prevailed over good sense in the Cabinet Office.

Finally, Smarter Government also highlights ways to save £500 million in the future by introducing more stringent frameworks for SAPBs. How this figure was worked out is not clear, but the methods that will be employed to achieve it are. Their main proposal is to:

“Establish a more rigorous process for setting up ALBs, for example by requiring any minister proposing a new body to publish a full assessment of why the body is needed and set out why an ALB is the most effective delivery mechanism.”

What’s perhaps most amazing about this is the implication it gives that ministers haven’t had to give a robust justification for establishing an SAPB before; disgraceful, but somehow unsurprising.

Once SAPBs are set up, they are not properly assessed either. While notionally accountable to a parliament, in reality this is exercised all too infrequently. Indeed the report’s main example of a department ‘actively reviewing’ SAPBs cites the Department of Health’s 2004 review. That’s five years ago, and it should be noted that aspects of that review are still ongoing. Given how stubbornly they survive, many SAPBs seem to have an immortal existence from birth.

On a more positive note, the report calls for implementing sunset clauses at a SAPB’s inception. As they grow they tend to accrue broader, more diverse remits than was originally intended, so if they come under review after a specified time then hopefully this could go some way to prevent mission creep. But annual reviews must happen concomitantly with any sunset clause, to ensure that SAPBs are performing to the standard required and offering value-for-money.

Any proposal that will rationalise policy making has to be welcome given the enormity of the semi-autonomous sector. The Government’s proposals yesterday, however, should in no way be seen as a move to help ease the fiscal crisis, (or in truth, achieve any real rationalisation). The numbers may look impressive, but a real debate is needed over quangos, whether we call them SAPBS, NDPBs or arms length bodies. Semantics must not be allowed to blur the picture. A frank assessment of the true extent of the semi-autonomous sector will go to the heart of what we expect from the state, so that genuine rationalisation can occur.

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