Chief secretary to the Treasury Liz Truss and chancellor Philip Hammond
Government arm’s-length bodies could be in the firing line in the upcoming Spending Review, chief secretary to the Treasury Liz Truss has said.
In a speech setting out her vision for the Spending Review, Truss said the Treasury would made decisions on how to allocate money based on public priorities, not those of “vested interests” – including quangos.
Truss said the government had reduced the number of quangos from 561 in 2013 to 305 in 2017 following a “bonfire of the quangos” under former prime minister David Cameron.
However, the number is likely to have risen since that point as the government has had to establish several ALBs – thought to number at least 20 – as part of the Brexit process. Guidance issued by the Cabinet Office last year said that quangos should be set up “only be set up as a last resort, when consideration of all other delivery mechanisms have been exhausted”.
In her speech yesterday, Truss said the government was right to have cut down on the bodies in recent years.
“Across the board there were hundreds of opaque organisations with ill-defined aims demanding public money for their latest pet project, erecting barriers and piles of bureaucracy and admin.
“But it is still the case that the administration budget of these bodies costs us £2.5bn. And that too many hard-working public servants and business people are spending their time filling in forms and applying for grants."
She said funding allocations for the next three years would be determined according to the services people most valued in what she branded the “People’s Spending Review”. Core public services such as the police, education, roads, defence and the NHS would take priority, she said.
“There is a growing blob of lobbyists, corporations, quangos and professional bodies who ask again and again for government favours – arguing that they are the exception, that their cause deserves special treatment,” she said.
“But if we gave in to all their demands, what would we squeeze out? And should they be taking money from those on relatively low earnings, who could be spending it on a new car, a holiday, or a treat for their children?”
Truss also reiterated comments made by chancellor Philip Hammond in last week’s Spring Statement, when he said the Spending Review would focus on ensuring value for money.
Hammond used his speech to confirm the review would cover a three-year period and that the process would begin before the Summer Recess. “And it will maximise value for taxpayers’ money in public services with a renewed focus on delivering high-quality outcomes,” he said.
Truss said the government would “prioritise ruthlessly” to achieve this, and also indicated funding would go to “less sexy project” including improving local transport.
And she also said it would consider investing in long-term policies, the effects of which may not become apparent for many years, giving the example of the Department for Education’s early-intervention phonics scheme.
“The benefits [of that scheme] will be felt most in 10-20 years’ time, when these children are entering the world of work and starting their own families… This is exactly the sort of long-term policy the government should be supporting,” Truss said.