Quango cull: where’s the evidence?

Marc Cetkowski PIPC

Public Finance, November 2010

Cabinet Office minister Francis Maude insisted today that the government was not ideologically driven to scrap quangos, nor was it simply to save money. Its main motivation is to increase accountability.

This could be a persuasive argument. Yet surely it would be more persuasive if we had sight of a ‘master design’, a public showcasing of how the new arrangements will deliver improved and more efficient services to people. Rhetoric, or lack of, to date suggests the coalition government does not know the exact amount of savings these cuts will achieve.

The reality is that the costs of closing or merging quangos, downsizing organisations and departments, could well be more than the savings. Does any of this make any sense?

There could have been a debate. As yet, there hasn’t been. The drip-drip message of necessary austerity has resulted in a collective acceptance that tough cuts are required. This environment has allowed the coalition a quasi mandate to cut deeper than any government could otherwise expect to get away with. But that should not excuse a lack of detailed analysis, planning, a public scrutiny of costs versus benefits, cost savings versus the costs of transformation itself.

It is hoped, mainly by the coalition marketing machine, that the potential devastation caused over the next six to 12 months will be quickly superseded. In five years’ time ministers want to be able to stand on a re-election platform and announce ‘we made the savings…we bought the deficit back into control’. But what of the localities and a plethora of half-dismantled organisations left in the wake of making cuts at breakneck speed? What about the aftermath?

‘Localism’, the coalition will argue, will be the answer. In other words, central government brought us back from the brink in terms of the deficit but under ‘Big Society’ it was always going to be up to localities to decide what to do in response – to make it all work.

So with the Spending Review announcements of some 190 quangos to be abolished, a similar number to be reformed, others to be merged and many key organisations still under review, fear and loathing running rampant at all levels of the government’s delivery chains, what vision or plans have been put forward to support the delivery of savings?

We often hear of cost savings through consolidation and reorganisation – less so the finance it takes to implement this scale of change. In the private sector, where accountability is king, such costs are only too well known. We understand that closure of the nine regional development agencies could cost as much as £1.5bn in pension payments; getting rid of the Audit Commission will cost in the order of £490m in payouts and liabilities; and the Crown Prosecution Service has indicated that its merger with another body will cost around £40m.

If the savings are there, then great; but let’s make sure that we know what they are and what the costs of reaching this utopia will be before starting a game akin to axe man meets musical chairs.

What might be more palatable to the voting public is to ‘sell’ the message of cuts by unveiling the future blueprint for transforming service delivery. Without this blueprint, many predict we will soon arrive at a prolonged period of disjointed activity at most levels of government. This will be marked by inaction and navel gazing as some organisations and localities try to make sense of it all.

Inactivity and stagnation will result, but even this may be preferable to kneejerk reactions causing medium and longer-term damage to the service delivery chains across the main government service areas; leading to inconsistent and, in some cases, opposing models of providing services.

One thing’s for certain, we are yet to see any plans that, in a transparent and accountable way, provide the future service models that will support the Big Society challenge.

Marc Cetkowski is the head of government and public sector at consultancy PIPC.