Smaller Government: Shrinking the Quango State - Public Administration Committee Contents

Written evidence from Professor Matthew Flinders, Department of Politics, University of Sheffield

  1.  The global financial crisis and the specific pressures on public spending in the United Kingdom have forced the Coalition Government to review the structure of the state and the role played by quangos. The Public Administration Select Committee's (PASC) inquiry into quangos therefore represents an incredibly timely opportunity to cultivate a mature and balanced discussion regarding the use of quasi-autonomous public bodies within the British administrative system.

  2.  Most academic and journalistic accounts of the role played by quangos within British governance have tended to create more heat than light.

  3.  This memorandum attempts to respond to this situation by daring to suggest that quangos, as part of a reformed governance system, may actually help revitalise public engagement in politics. They can therefore be examined as one element of a broader debate concerning the "Big Society".

  4.  A commitment to launch a "cull of quangos" has been part of every government manifesto since the early 1970s. The general pattern, however, has been a small amount of "cosmetic pruning" (inevitably involving the abolition of advisory bodies and the amalgamation of small executive bodies) followed by an expansion of the general sphere of "delegated governance".i

  5.  Nobody knows exactly how many quangos exist. This reflects a number of definitional debates and the British constitution's inherent preference for "muddling through". A review of all quangos (ie non-departmental public bodies (NDPBs), special health authorities, non-ministerial departments, public corporations, "floating bodies" that have simply been created, etc.) was undertaken in 2004 in response to a previous PASC report but the results were never published due to political concerns about the number of bodies that were identified. The British state has been "walking without order" for some time. ii

  6.  The PASC should not therefore restrict its inquiry to executive NDPBs.

  7.  The Coalition Government has already announced the abolition of a number of quangos. Three tests have been outlined by the Government—is the function technical; does it need to be politically impartial; and do facts need to be determined transparently?—in order to decide which bodies should be abolished. These will be enshrined in the Public Bodies (Reform) Bill.

  8.  These criteria are far too broad and leave huge areas of discretion (and therefore confusion). This was clear from the leaked Cabinet Office memo that was published by The Telegraph on 23 September 2010. This suggested that 177 quangos had been identified for abolition, four for privatisation, 129 for amalgamation into just 57 bodies and 94 quangos would be "kept under review". The lists of "births, deaths and marriages" reveal very little in terms of consistency or a clear rationale. For example, it remains unclear why the Human Fertilisation and Embryology Authority is earmarked for abolition, despite its technical knowledge and expertise, at exactly the same time as the new Office for Budget Responsibility is being established.

  9.  The criteria are therefore under-developed and the review process for deciding on how any quango sits against these tests remains opaque. The specific process for reviewing quangos, how the review process is constructed in terms of members, the role of representatives of the organisation in question within the review process and particularly how the procedure varies for cross-border public bodies needs to be clarified.

  10.  The document published in The Telegraph on 23 September 2010 had been leaked to the press and should therefore be treated with caution. However the contents of the document combined with the previous reports of the PASC does point to a more fundamental weakness at the centre of British governance.

  11.  As the Institute for Government's Read Before Burning report highlighted in July 2010, the use of quangos as a tool of governance is not in itself a problem. Quangos exist in all advanced liberal democracies around the world. The real problem stems from the lack of any clear governing framework or set of principles that regulate the use and role of quangos. A clear set of principles and organisational forms would facilitate the use of these bodies within a coherent and transparent framework. The question is therefore whether the Coalition Government has the energy or capacity to address this deeper basic problem. This would involve the design of probably no more than four formal organisational categories. All existing bodies would then have to be designated within a specific form (for which the appointment, accountability and audit procedures would be clearly set out) and new bodies would be established as a specific form of organisation within this framework.

  12.  The long-term financial savings of reforming quangos will only be realised if measures are taken to prevent the ad hoc creation of new bodies in the future. In this context the Minister for the Cabinet Office's statement that the Government supports an enhanced role for select committees in the decision to create new bodies in the future is a welcome development—but one that must be tied to a more coherent governance framework.

  13.  Designing the specific organisational forms and deciding how existing bodies should be re-classified would essentially require a thorough administrative "Spring clean" but the results would be significant in terms of increasing economic efficiency, reducing the complexity of delivery chains, clarifying lines of accountability, and improving the strategic capacity of ministers (many of whom have no idea how many or which quangos they are actually responsible for).

  14.  The current confusion and opacity reflects the fact that the capacity of the Cabinet Office to oversee and regulate the creation of quangos, as well as offer advice and support to departments, has been gradually hollowed-out in recent decades. The Haldane Report of 1918 recognised the need to support departments and monitor the role and number of quangos. The Anderson Committee of 1942, however, found the number and range of quangos "bewildering…it is impossible to deduce, either from existing practice or theoretical considerations, any general rule on the matter". As a result the committee recommended the creation of both a centrally maintained and comprehensive list of quangos. It also recommended the establishment of a central team of officials whose role would be to disseminate guidance and "best practice", provide training on specialist roles such as departmental sponsorship, and generally prevent the ad hoc proliferation of quangos that had occurred in the past. These recommendations were never fully implemented. The Machinery of Government division within the Cabinet Office was gradually run-down throughout the 1990s and today not event the small "Agencies and Public Bodies Team" exists. A central strategic unit should be established to provide strategic monitoring, guidance and support across Whitehall.

  15.  This process of mapping the state should be undertaken in a careful and considered manner. Media demands for an immediate "bonfire of quangos" should be rejected and (most of all) those serving within quangos should not find out the fate of their organisation through the media. Tens of thousands of members of the public serve on the boards of quangos at the local, regional and national level for absolutely no financial remuneration. As Lord Nolan discovered in the mid-1990s, only a tiny proportion of those individuals serving on the boards of public bodies (usually the chairperson) actually receive a significant salary for their service. Contrary to the media caricature, the board of a quango is not a place to go to make money.

  16.  In light of the fact that the majority of appointees view their work on the boards of quangos as a pro bono contribution to public life the committee might consider the issue of incentives and appointment procedures. In recent years the role of select committees in relation to a range of the most senior ministerial appointments to quangos has increased dramatically. The latest stage of this rapidly changing relationship was the Chancellor of the Exchequer's announcement last month of his intention to give the Treasury Select Committee a statutory veto over ministerial appointments to the new Office for Budgetary Responsibility.

  17.  The growing role and capacity of select committees in relation to ministerial appointments may help assuage public concerns regarding transparency and accountability. At the same time, however, three related issues and anomalies (politicisation, regulatory overlap, and complexity) demand attention.

  18.  The opportunity for a select committee to question a minister's preferred candidate under the pre-appointment scrutiny procedure creates a danger that the individual will be drawn into broader party political arguments. The unfortunate politicisation of candidates, as the experience of the current Children's Commissioner for England, Dr Maggie Atkinson, before the Education Committee in October 2009 arguably demonstrated, is an issue that risks deterring talented individuals from applying for vacancies. The lesson from legislative confirmation hearings in other countries is that many candidates walk away from appointments because they feel that the appointments process is simply abusive. This is generally linked to aggressive committee appearances in which applicants are asked about their personal life and asked hostile questions about their background.

  19.  The relationship between the regulatory scrutiny of ministerial appointments (by the Commissioner for Public Appointments) and the parliamentary scrutiny of appointments (by select committees) remains unclear. Many of the positions that fall within the remit of pre and post-appointment hearings are already subject to the rules and procedures of the Commissioner and it is therefore unclear what the "added value" of the parliamentary stage brings to the process.

  20.  This concern regarding regulatory overlap flows into a broader concern about complexity. The governance of public appointments to quangos has possibly become congested in terms of institutions and processes. A vast range of independent appointment commissions now exist—House of Lords Appointments Commission, Appointments Commission, Office of the Commissioner for Public Appointments, the Civil Service Commission, Judicial Appointments Commission—without any little rationale for why differing powers have been granted to different commissions. My concern is that processes have become too slow and cumbersome—a "maelstrom of complexity"—to the point that public appointments are becoming unattractive to the very people the public sector needs to recruit.

  21.  If the gap that has apparently emerged between the governors and the governed is to be closed then new opportunities and arenas of public engagement will have to be cultivated. Public service on the boards of public bodies at the local, regional and national level provides a way in which large numbers of people who have little interest in either standing for elected office or partisan party politics more generally can make a contribution to society. Quangos therefore offer a degree of democratic potential that has not been acknowledged or fully explored within debates about the "shrinking state" and the "Big Society".

REFERENCESi  For a review see, Flinders, M.2004. "Distributed Public Governance in Britain", Public Administration, 82 (4), 883-909.

ii  Flinders, M. 2008. Delegated Governance and the British State: Walking Without Order (Oxford: Oxford University Press).

October 2010

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