Politicians often have a problem with “quangos” in opposition, but less so in government. Margaret Thatcher threatened to “cull the quangos” on the election trail and then used the creation of executive agencies – another type of public body – for her New Public Management reforms. Tony Blair promised public bodies would meet the “dustbin of history”, but his government created new public bodies to run its flagship programmes and address public concerns when things went wrong.
The gap between rhetoric and reality when it comes to public bodies continues today. While few politicians or members of the public like the idea of the “quango state”, in practice politicians find public bodies a useful tool. What better than an expert and single-minded body to deliver your priorities?
The government has proposed two new public bodies recently to deal with two of the biggest issues facing the country. This week, energy minister Kwasi Kwarteng proposed the creation of the Future System Operator (FSO) in response to the current energy crisis, while the levelling up white paper in February included plans for a new body to help with local authority data collection and analysis.
While the choice of public bodies to deliver these specific functions can be debated on their merits, it does contrast with some other ministers’ recent pronouncements. The minister now in charge of public bodies, Jacob Rees-Mogg, mused in a Times interview in February whether many such bodies were really “doing something that anybody needs to do” and asked “if it’s not necessary, why is it there?” Just a few weeks later, chancellor Rishi Sunak announced a new efficiency drive across government, including a plan for at least £800m in cuts to public body expenditure. The Treasury hopes this money will be found in efficiency savings from reducing public bodies’ reliance on consultants, encouraging digitisation and extending the use of shared services and buildings. But cuts will be difficult to achieve, given the consolidation that has already taken place across the public bodies landscape.
Sponsor departments are already required to conduct a “tailored review” of each of their public bodies every five years, to “provide a robust challenge to and assurance on the continuing need for individual organisations”. But reviews are too often treated as a tick-box exercise by departments and bodies, and barely half of bodies have been reviewed within the government’s five-year target. In response to criticism from the National Audit Office, the Cabinet Office has promised to reinvigorate the review process, widening the scope of reviews to include departmental sponsor teams themselves and bringing in more external challenge. This ambition is welcome – and offers a concrete mechanism for change if Rees-Mogg and Sunak really want to “trim the fat” from public bodies.
"If Rees-Mogg has indeed identified functions or bodies that he deems unnecessary, the government should reform or abolish them. But the government should also lay out a clear vision of when public bodies are and are not the appropriate model for delivering services"
Beyond this, while achieving cost savings may be one legitimate priority, ministers should be clear-sighted about the choices available to them in their approach to public bodies. If Rees-Mogg has indeed identified functions or bodies that he deems unnecessary, the government should reform or abolish them, seeking parliamentary approval where appropriate. But the government should also lay out a clear vision of when public bodies are and are not the appropriate model for delivering services. If this work is not done strategically, government risks an incoherent approach, creating public bodies with one hand while abolishing them with another.
The Cabinet Office has said it intends to issue a new public bodies strategy that will enable a more joined-up approach to public bodies reform and cost savings. But Brexit and the pandemic have so far distracted ministers from setting out a government vision for public bodies, while ministerial turnover in the Cabinet Office, which has had three different ministers responsible for public bodies already in 2022, has not helped. Ministers should now get on with publishing the strategy and use it as an opportunity to define what they want from public bodies as a major delivery mechanism for government – not as a target for quango-busting rhetoric.
Grant Dalton is a researcher at the Institute for Government