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The noble Lord, Lord Forsyth of Drumlean, is to be congratulated on raising the issue and beginning a debate that has ranged very widely indeed. It would be appropriate to express some understanding if the Minister found it impossible to deal fully in his remarks with the topics raised in the debate. I welcome the question asked by the noble Lord, Lord Forsyth, which was core to his message about the multiplication of quangos and the questions he asked about the diminution in the availability of information about those that exist. There is a need for a central point where information can be drawn down by those seeking to oversee their activities; the department-by-department quest is not always as fruitful as it might be.
That gives rise to the question of the suitability of our parliamentary oversight arrangements for these non-governmental organisations. The Public Administration Select Committee is doing a remarkable job in another place in bringing together the great issues, some of which have been touched on in this debate. I am not certain that we need another agency or oversight body for that purpose. Most of the departmental Select Committees look very closely at the activities of non-governmental organisations and it would be wrong to leave the impression that parliamentary oversight is not continuous and deeply probing.
The inquiry that the Public Administration Select Committee is conducting into the buying or commissioning of services from charitable and voluntary organisations for the public service is profoundly important. As the noble Lord, Lord Low of Dalston, said, its report is awaited with eager anticipation. It is fair to say, as the noble Baroness, Lady Pitkeathley,
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I take the point made earlier that the importance of the third sector in the delivery of public services is not to be exaggerated and is not to be seen as a substitution for the obligation of government and the public sector to provide those services. The statistic was revealed in a recent speech by the Chancellor of the Duchy of Lancaster in another place that only 2 per cent of National Health Service public expenditure is spent on such bodies. That could, if left alone, give a misleading impression of its importance. As my noble friend Lady Walmsley pointed out, palliative care in this country is largely provided by that sector.
I have two concluding points. One is that if we are going to have proper scrutiny and oversight of third-sector providers of services, it is important to have better standardisation of the contracts that they operate. Our noble friend Lord Adebowale made that point in evidence to the Public Administration Select Committee and we should take it seriously.
My second point is about complaints. Nearly all third sector organisations ought to provide proper complaints procedures and mechanisms to deal with user complaints. It is surprising that the Charity Commission survey conducted last year found that 69 per cent of charities did not have complaints procedures at all, with 40 per cent of them providing public services. The independent complaints reviewer for the Charity Commission gave that evidence to the Public Administration Select Committee. He said that in this growing sector of public service provision the citizen remains unprotected by redress mechanisms other than the court. That is a matter to be addressed.
In conclusion, I am grateful that Ed Miliband, the Minister responsible, has strongly recognised the importance of the independence of these organisations not being put at risk by being contracted to deliver services. More important than the services that those bodies provide is influencing public opinion about the quality of service that could be provided and their immediate understanding of issues that are not often understood by some of the public sector, or even private sector providers, but which greatly enhance the scope and effectiveness of public service provision.
4.45 pm
Lord De Mauley: My Lords, I thank my noble friend Lord Forsyth of Drumlean for initiating this very worthwhile debate, and I thank all noble Lords who have contributed their knowledge and experience by speaking today.
In particular, I congratulate the noble Lord, Lord Wallace of Tankerness, on his maiden speech. I share his recreation, according to his entry in DodOnline of what he modestly calls novice horse-riding, and I look forward to his future contributions.
When my noble friend requested this debate, his intention as he said, was to focus the spotlight on quangos—quasi-autonomous non-governmental
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The noble Lord, Lord Best, talked specifically of his experience in the housing association sector. The noble Lord, Lord Low, too, raised some important questions, but in view of the constraints I doubt that I shall be able to spend more time on this area, and I apologise to those noble Lords because, as the noble Lord, Lord Wallace, said, these are very important subjects worthy of their own debates.
Following my noble friend’s lead, I shall focus my arguments on quangos. The new Labour Government’s definition of a non-departmental public body in 1997 in a Cabinet Office publication Public Bodies was:
“A body which has a role in the processes of national government, but is not a government department, or part of one, and which accordingly operates to a greater or lesser extent at arm’s length from Ministers”.
The paradox is, of course, that the more you encourage them to operate at arm’s length from Ministers the less accountable to Parliament they become. A cynic might say that that is sometimes the intention: if a policy is unpopular, or there is a failure in delivery, make sure there is a quango to blame it on. Likewise when a quango with geographically focused objectives is established by national government, it is almost by definition unaccountable to the local communities with which it operates. The regional development agencies are a classic example, and the problem is about to get worse. Ministers talk about strengthening the role of local communities in the planning process, yet they are proposing to transfer important housing and planning powers to the completely unaccountable RDAs. The noble Lord, Lord Best, also talked about housing and referred to different concerns regarding forthcoming legislation, which is likely to centralise power over housing associations.
A major criticism of quangos is that unelected officials have responsibility for performing central and local authority functions, without, as my noble friend Lady Sharples said, full accountability to elected politicians. Critics believe that quangos are insulated to a greater or lesser degree from direct ministerial involvement, weaken the scrutiny mechanisms of Parliament and remove control and responsibility at local level. Criticism has also been made of their escalating cost.
However, before I deal with that, I would like to highlight the difficulty in identifying the number of NDPBs—or quangos—in existence. A sleight of hand has been at work in the Cabinet Office figures, by, for
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Furthermore, even if there has been a reduction in the number, it has been achieved through amalgamation and reclassification—as well as by discounting those for whom responsibility has been devolved—and should not be seen as indication of a decline in their role or significance. That the very opposite is true is shown so clearly by the fact that NDPB expenditure is colossal and rising inexorably.
According to a recent report, quoted by my noble friend, from the Economic Research Council, which has aggregated the costs of the 883 public bodies in the Cabinet Office’s 2006 report, total annual spending on those public bodies was £174 billion. Removing the NHS quangos, the total is still over £40 billion.
Since 1997, this Labour Government have pursed an agenda of what they call partnership, which has prompted the increased deployment or creation of quangos, as a means of instituting new public policy initiatives. Yet speaking in 1995, as my noble friend Lady Sharples said, Tony Blair had promised to,
if Labour were elected at the next general election. As my noble friend Lord Forsyth pointed out, none other than Gordon Brown also said then:
“The biggest question ... is ... why there is not more openness and accountability ... The real alternative is a bonfire of the quangos and greater democracy.”
As long ago as 2003, the Public Administration Select Committee, to which the noble Lord, Lord Maclennan, also referred in such positive terms, concluded that there was a basic lack of information about which bodies exist and their roles and powers; that the Cabinet Office publication Public Bodies, did not include all bodies and was commonly subject to errors and omissions and that public mistrust in the quango state remained.
In conclusion, no reasonable person would, I dare suggest, say that there is never a role for any quangos. However, the extent of their use and purpose, their lack of accountability, independence or supervision and, importantly, their complete dislocation from the local communities that they serve as well as of their cost have, as my noble friend said, got completely out of control.
Messrs Blair and Brown both demanded a bonfire of quangos and now claim that there are fewer of them. Since Labour came to power, the amount of public money spent on quangos has soared out of control, from £24 billion to £170 billion per year. The Government’s reliance on commissions, task forces and quangos raises serious questions about accountability, democracy, independence, scrutiny and public trust in the way that this country is governed.
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4.53 pm
Lord Davies of Oldham: My Lords, I am grateful to all noble Lords who have spoken in this debate. I am replying to a debate in which, fairly typically, the noble Lord, Lord Forsyth, produced a magnificent firework display in his opening contribution. The problem with fireworks is that they can be experienced in two ways. The first is the enormous explosion—that was discussed by all those who followed the noble Lord—but the second is through their glittering stars; that approach appears in all the contributions that examined the role of the third sector and NGOs in advancing welfare in our society and improving the delivery of government services.
I will addresses myself to the bang in a moment—and will not sell the noble Lord, Lord Forsyth, short—but will deal with the stars first. The first star was the noble Baroness, Lady Walmsley, who hoped that this debate would be largely about the third sector and charities. She wanted to clearly identify where we could improve the Government’s relationship with charities and the success of the service they provide, while not compromising their many essential functions which are well beyond any concern of government. She was followed by the right reverend Prelate the Bishop of Carlisle who emphasised that, as far as the church was concerned, this different and independent role must be preserved. It is bound to be preserved and appreciated. At the same time, the church has a role to play within the delivery framework of some services.
I emphasise that we take the criticisms voiced in the debate seriously. The noble Baroness, Lady Walmsley, identified them first. There is a problem with contracting. The noble Baroness is right: short-term contracting puts any organisation under pressure, and charities often do not have the resources to cope with some of these challenges as easily as other bodies. Of course, charities are entitled to include the full costs in bidding for services, and we are concerned to train and develop those involved in the third sector so that the kind of issues that she—and the right reverend Prelate, in terms of the church’s role—identified should be addressed. In developing an intensely fruitful new government approach, we should make sure of that.
The noble Lord, Lord Forsyth, did not comment on charities, but he will have recognised that other noble Lords have taken the opportunity of his debate to emphasise that how certain services are delivered is changing because of the nature of our society: the move from the welfare state to the welfare society. That is an extremely graphic illustration of the fact that people relate to the necessary support they receive, underpinned by the state, in rather different ways if it can be provided by organisations in which they have trust and with which they relate closely. Charities fulfil this role in extensive ways. I was grateful to the noble Lord, Lord Low, for identifying the crucial role of the charities in which he is involved.
The noble Lord, Lord Best, identified some of the most crucial aspects of the third sector: the housing associations. We know of his great expertise in the housing sector. I fear that what I received from him today was a trail of his contribution to the legislation
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Of course, in circumstances identified by the noble Lord, the old mechanisms in which social housing had been provided—with resources for local authorities to provide local council housing—have been transformed in recent decades into a new form of delivery and service. That requires crucial issues of accountability to be taken into account. I recognise that the noble Lord, Lord Best, will have something to say about the potentially overweening power of those appointed to be accountable for public money in this area. Others will have the chance to respond to that in due course.
I was delighted that the noble Lord, Lord Wallace, chose this debate for his maiden speech. I am also delighted at his arrival here. The old canard for those of us who returned to the Pennines was that all the Scots got home a good deal faster because they got aircraft to Glasgow or Edinburgh, or fast trains to Aberdeen, while we struggled to get back to our areas.
I must say to the noble Lord, Lord Wallace, that I had enough trouble with the broad texture of this debate, and the rather specific questions he introduced are a real problem for me to respond to. I can say only that the Government are concerned about the judgment with regard to the Human Rights Act and private care, and we are examining the position. The Government are wrestling with the problem of the Freedom of Information Act as it stands. Those challenges are still to be responded to. I appreciate that he sees merit in extending the Act further. I cannot promise an early and immediate response to that, but he has registered the fact that he will be campaigning strongly on it. We are therefore duly warned of the contribution that he will make.
I was, of course, enormously grateful to my noble friend Lady Pitkeathley for her contribution. The House recognises her expertise in this area. She was able to demonstrate the extent to which the Government, in shifting ranges of services to be delivered through the sector, have set out to wrestle with the significant problems of dealing with charities differently from other agencies—a point that the noble Lord, Lord Maclennan, also emphasised. We have made substantial commitments. The Cabinet Office has a Minister for the third sector. That provides accountability but it also means that at ministerial level we have responsibility for effective liaison with the third sector and with charities, and that is a base on which we can work for the future.
The noble Lord, Lord Forsyth, introduced this debate in his usual challenging way. What about the issues that he raised and the problems of the quangos? He asked where the promised bonfire of the quangos is. He will have heard the noble Lord, Lord De Mauley, indicating that he thought that the Government are shifting their criteria somewhat—and he was not including devolved Assembly quangos in the criteria—but nevertheless, somewhat grudgingly, recognising that the Government are able to point to the fact that far from mushrooming, quangos are under control. Since 1997, they have fallen in numbers. The noble Lord,
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I think that the noble Lord was perhaps stressing the point too strongly, but it is the case that we expect quangos to be responsible. It is necessary that they are subject to regular and rigorous review. The noble Lord touched a rich vein of support with the Government when he lamented the fact that almost every Bill that goes through the House has an amendment about the annual report. I hasten to add that it is generally tabled by the Official Opposition, and we all wonder what its value might be.
I chaired a government quango for a while. We were well aware, as the noble Lord rightly said, that our circulation list included a large number of people whose filing cabinet for our report was a proverbial wastepaper basket. It was quite difficult, however, to suggest to people that they were being careless about the hard work you had done. I can talk about it freely now because it was the Further Education Funding Council, one of the bodies the noble Baroness, Lady Sharples, referred to, which has disappeared and now comes within the framework of the Learning and Skills Council, but that body appreciated the fact that all real stakeholders who took an interest in its work read this report and responded to it in a fairly rigorous way. So the question of the publication of official reports is not all a bonfire of the vanities. I would not for one moment want to dissuade quangos from publishing reports which are necessary for their openness and accountability. If others do not read them as extensively as they might, it is a salutary exercise for those who are consuming public resources and responsible for public resources, as quangos are, to compile a report which is defensible in terms of public scrutiny.
The noble Baroness, Lady Sharples, asked about the pay for quangocrats, as she called them—people who serve on quangos. This is a matter for individual departments but she will know that a very large number of people who serve on quangos are unpaid. Many people serve quite unpaid on the boards of advisory bodies and across the United Kingdom thousands of men and women serve voluntarily on such bodies. I do not think all the issues which have arisen about excessive pay in the public sector are addressed specifically to quangos. There are one or two key government bodies which have had to adjust to the market rate. The Government have often pitched it at one level and not had enough takers. They have been obliged to increase the rate of pay in order to get somebody to fill the role.
This has been a fascinating debate and an extremely difficult one to respond to with any degree of coherence, but the themes that come through are clear. The noble
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I appreciate that my time is up. I want to apologise to the House for the rather split nature of my response. That is a reflection of the fact that there was a duality to this debate. But there is coherence in that answerability must occur right across the sector. As far as quangos are concerned, we must guarantee that that is so. We must also welcome the development of the welfare society in which many of the state services are delivered more effectively through third sector organisations and charities and the church, rather than through the old models of the delivery of services.
Lord Forsyth of Drumlean: My Lords, I beg leave to withdraw the Motion for Papers. Given the scope of the debate, if I did not, the officials would have to hire a small train.
Motion for Papers, by leave, withdrawn.
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