Time to trim the quangos – and their chiefs

The press is alive with the discussion of too much spending and too much borrowing by the public sector. There seems to be several sources of the noise.

The PM wants to highlight the issue to stress the contrast between government investment (his way of describing too much spending, and waste, as well as investment) and so-called Tory cuts, the damaging reductions in public services which he invents for the purpose.

The Treasury wants to demonstrate it does understand the dangers of too much spending and borrowing, and is leaving increasingly unsubtle hints that it does not agree with the current spending trajectory. We read today of “secret” plans to cut much more from budgets to head off a public spending and borrowing crisis.

The Oppositon – both Conservatives and Lib Dems – want to get across the message that current spending is not only unsustainable, but contains wasteful and undesirable elements as well as important service provision which should be protected.

Yesterday I did a re run of ideas for immediate spending reductions and more control over the main costs of running governemnt. These met with general approval. For the record, abolition of ID cards and regional governemnt is Official Opposition policy as well. All the other ideas are likely to be taken up in some form or other by whoever governs the country, as they are the least painful ways of starting to make the necessary adjustments.

Today I wish to reinforce two messages.

One, the quango state has increased, is increasing and ought to be diminished. In recent years too many new quangos have been set up. Too many quangos have employed too many expensive people. Too many quangos demand ransom money from government to carry on, and hike their fees and charges well above inflation to swell their revenues more. Many Ministers have failed to review corporate plans, to order cost control or to prevent unreasonable increases in fees and charges. There needs to be a repeal bill to get rid of some of these bodies altogether. Ministers need to go through every corporate plan and agree ways of cutting costs and improving efficiencies. The aboltiion should include the South East Development Agency and the South East regional planning and housing empires.

Two, the public sector rich list needs to be asked to cut its demands on a near bankrupt public sector. Many companies are asking their workforces to accept lower pay, or no pay for a period, to see them through the recession. I suggest that anyone earning over £50,000 a year in the public sector should be asked to accept a pay freeze – including MPs who should also receive an expenses cut when the new system is finalised. Anyone earning over £100,000 should be asked to take a 10% reduction in pay until the deficit is down to say 5% of national income, and anyone earning more than £200,000 should be asked to take a bigger cut to be agreed individually. If higher paid believe in public service, we should want to do it for less than we can earn in the private sector.

The public sector administrative and regulatory pay bill has to be brought under control. That requires fewer quangos, fewer functions for quangos, more efficient quangos, and more realistic pay for people at or near their top.

This entry was posted in Blog. Bookmark the permalink. Both comments and trackbacks are currently closed.

33 Comments

  1. Waramess
    Posted July 5, 2009 at 8:54 am | Permalink

    To talk of savings to be made out of wasteful Socialist spending makes for a good story but is far removed from reality.

    Your memory is not too short to remember Mrs Thatcher being unable to find sufficient such savings when she assumed office.

    The cuts the next Government will be obliged to make will be painful and the Tories might just as well pre-warn the electorate.

    If they fail to do so they will be seen as complicit or worse still incompetent and may well find their own period in office a very short one.

    • jean baker
      Posted July 6, 2009 at 7:39 am | Permalink

      Growth under the last Conservative government was 12.5% when Labour were elected – they’ve ‘succeeded’ in achieving (last count) nearly – 30% growth.

      The electorate have two simple choices – ‘socialist totalitarianism’ or a return to the principles of democracy – free enterprise, free opinion and free speech.

      Labour favour Federal Europe with Blair as next president

      • Waramess
        Posted July 7, 2009 at 7:13 am | Permalink

        I take no issue with what you say, I was simply pointing out that Mrs Thatcher had very little success in generating savings from cutting waste in the civil service.

        Cuts will have to be made and the Tories will need courage because for the cuts to be beneficial they will need to be deep and often painful.

        Presently they are portraying the cuts as something that can be made with very little pain, and this is an impossibility given the almighty mess this Labour government have made of the economy.

        The printing of money always leads to inflation although it takes time to feed through but, it is inevitable, so, the Tories will have the unenviable task of cutting costs whilst inflation is moving into third gear and whilst the economy continues to stagnate.

        Better warn the electorate now

        • jean baker
          Posted July 7, 2009 at 11:22 am | Permalink

          Mrs Thatcher’s leadership was based on sound economic principles and prudence – hence the growth rate inherited by Nulabor.

          Conversely, as one example of many ‘quangos’, BERR reportedly runs as a fifth column within government working for corporations to undermine democracy and the public interest – it’s budget since Mandleson returned is reported to be £1.92 b (taxpayer funded).

          Mrs Thatcher faced an unenviable task clearing up the last mess created by Labour – when the going gets tough, the tough get going. There’s far more to Britain that Nuliebor as the local election results confirmed.

  2. Tim
    Posted July 5, 2009 at 9:41 am | Permalink

    As ever an excellent contribution to the debate, whilst i agree with the suggestion that future accural of public sector pensions should be switched ito a defined contribution scheme. In current circumstances this hould perhaps also be capped to the first £75,000 of earnings.

  3. Johnny Norfolk
    Posted July 5, 2009 at 9:46 am | Permalink

    Do what Mrs Thatcher did when she came to power.
    No one missed them at all.

  4. Matthew Reynolds
    Posted July 5, 2009 at 9:53 am | Permalink

    One simple idea is to do an audit of the QUANGO’s ! All those that contribute to the public good according very strict value for money criteria should be allowed to survive only doing the bare minimum necessary on the lowest possible budget.

    The aim should be to scrap as many public bodies as possible by merging or scrapping them entirely by returning powers to local councils or ministers to improve democratic accountability. Expensive duplication must be avoided. In some cases perhaps a QUANGO could have its public funding cut off and be told that to survive it must charge service users directly for what it does. Letting the free market loose might decimate the QUANGO’s.

    A pay cap for QUANGO members of say £40,000 p/a should apply and all QUANGO’s that survive my proposed cull should all have a sunset clause imposed on them. That means that in five years after this process that QUANGO would cease to exist with the funds spent on them returning to HM Treasury for national debt reduction. The only way to avoid that would be for Ministers to bring an Act of Parliament forward to preserve the said public body & its funding – that Act could only be valid for a further five years before the sunset process kicked in again. This would put pressure on government ministers to keep government small as having to defend & justify QUANGO’s in Parliament on a regular basis would be time consuming & unpopular.

    So Adam Smith’s Invisible Hand & Edmund Burke’s belief in constitutional beliefs in parliamentary accountability & local decision making could be applied in the 21st Century to end Brown’s bloated Client State. Reducing QUANGO related spending would reduce the size of the state and public borrowing – hardly a bad idea in the present economic context is it ?

  5. jean baker
    Posted July 5, 2009 at 10:03 am | Permalink

    John,

    I agree totally.

    As a reputable journalist recently wrote – ‘Labour has become the passengers party …. transferring money and privileges to vested interests liable to identify with the labour political Brand’.

    In ‘real’ economic terms the ‘money’ does not exist and never has – continuing and increasing levels of debt to taxpayers is the ‘price’ Joe Public is paying for Labour ‘buying’ party loyalty. It will increase because they want ‘clenched fist socialism’ to remain in power and ‘rule the roost’ for another term.

    Honest, open, localized government does not need ‘quangos’ – jackboot legislative ‘minders’ funded by ‘non existent’ taxpayer funds.

  6. Donna W
    Posted July 5, 2009 at 10:08 am | Permalink

    I hope you’re including the BBC in your proposed freeze/cut of excessive salaries. The BBC spends its revenue, which is basically a flat-rate tax, in a profligate and excessive manner. We don’t need BBC executives earning hundreds of thousands a year – or so-called talent earning millions.

    • jean baker
      Posted July 6, 2009 at 7:42 am | Permalink

      Browns Broadcasting Corportion – executives are overpaid for spouting left wing propaganda.

  7. Denis Cooper
    Posted July 5, 2009 at 10:19 am | Permalink

    Public sector workers at all salary levels will be lucky if they get away with just a pay freeze.

    The Latvian economy is in such a mess that the government has been forced to make savage cuts in public sector wages; and even worse it has resorted to mass sackings, even of frontline workers such as teachers.

    All of which is driving the economy down further and making the situation worse, so that one round of budget cuts has to be followed by a second, then a third …

    http://euobserver.com/9/28409

    Some relief would come if the lat exited the ERM, as the pound exited the ERM on September 16th 1992; but the EU and the IMF are bullying the government into maintaining the peg to the euro, and in any case Latvians foolishly took out loans in euros.

    All that stands between the UK and Latvian-style meltdown is the Bank of England “printing money” to fund the government’s budget deficit.

    As would be clearer if the Bank was literally printing money, and public sector workers were still getting wage packets – by now, they would have noticed an unusually high proportion of crisp new banknotes in their pay.

  8. Posted July 5, 2009 at 10:34 am | Permalink

    I hope the opposition recognises that to abolish †he regional governments means a head-on clash with the EU. The new Government must stand firm and refuse to be cowed

    • jean baker
      Posted July 6, 2009 at 8:21 am | Permalink

      Quite so, despite being loathed, as was the Iron Lady – Margaret Thatcher.

  9. Martin
    Posted July 5, 2009 at 10:47 am | Permalink

    One thing that has disappointed me is that the Conservatives have gone in for the Sacred Cow approach to economics. Why for example are school teachers such a sacred item. According to today’s Observer we have less pupils but more teachers than in 1997! (Not a script from “Yes Minister”.)

    Why do my retired school teachers or GPs need a free bus pass, TV licence or prescription charges? Surely those with generous pensions should be expected to shoulder some of the burden? If an unemployed person on Sixty Pounds a week is expected to pay bus fares to the local dole office once a fortnight why shouldn’t those on a Pension over over Four Hundred Pounds a week mot pay? The same applies to a minimum wage worker who has to pay bus fares while rich pensioners do not.

    The sacred cow approach means that some parts of the public sector will be squeezed dry (the pot holes get worse and our railways creak along) while the sacred cows wonder on. It these roads and railways the private sector relies on to help rebalance and recover the economy.

    • jean baker
      Posted July 6, 2009 at 7:52 am | Permalink

      Education reforms under Labour necessitate employing ‘teaching assistants’ to cope.

      Free Bus Pass Scheme was, of course, not affordable even at the time Labour introduced it – a gimmick to gain political support.

  10. Acorn
    Posted July 5, 2009 at 12:02 pm | Permalink

    I have suddenly become a fan of the Audit Commission. This is a change of position from the days I was a Councillor. To be exact, I am now a fan of Steve Bundred, its CEO. He seems to be on the Redwoodian wavelength.

    He has been brave enough to say what needs to be said, these may be his own opinions; or, the script was written for him by the government spin machine, for public sector trade union consumption. An MP would have to be very sure of his vote and have the testicular fortitude to say such things directly.

    Besides, our form of parliamentary democracy has no mechanism to tell we the people, such truths; never mind having a plan to implement such.

    So, when I finally implement my plan to separate the executive from the legislature and I become the directly elected Prime Minister; Mr Bundred is on my list for appointment as Secretary of State for the Treasury. (note; remember to combine Audit Commission with National Audit Office).

    http://www.guardian.co.uk/commentisfree/2009/jul/05/spending-cuts-steve-bundred-audit

    Meanwhile, I am opening up a new line of enquiry to investigate what our new Supreme Court is going to do for us. You may remember that we had a Constitutional Reform Act 2005 that set it up. I assume it will have no where near the powers of the US Supreme Court (striking down unconstitutional legislation for instance) and I am reasonably sure it has increased the power of the executive over the judiciary.

    http://www.opsi.gov.uk/acts/acts2005/en/ukpgaen_20050004_en_1

  11. John Moss
    Posted July 5, 2009 at 12:20 pm | Permalink

    All people in the Public Sector earning over £50,000pa ought to have their final salary pension scheme closed and the accrued benefits transferred to a defined contribution scheme.

    MPs should go first.

  12. Posted July 5, 2009 at 12:20 pm | Permalink

    But what on earth will all those running dogs, lackeys, useful idiots, and placemen (and women) do for money? Surely, you do not suggest that they might actually put to useful work somewhere? Mind you, with the savings and their labour, we could reinstate the weekly bin collections.

  13. Posted July 5, 2009 at 12:29 pm | Permalink

    Andrew Marr today said to John Major that the choice could be “5p on income tax or cutting spending” which Major let him away with. Each 1p of income tax raises about £4 bn so the real choice, since we have a deficit of £180 bn is more like 45p on income tax or cutting spending which, while umpalatable, puts it in terms which give only 1 answer & 1 electable party (well UKIP too).

    On the same programme Martina Navratilova made a good point – that experimental evidence shows people can & are happier to face an unpalatable truth than not to know. I think they no longer believe Labour soft soap & will accept Conservatives who tell them the truth.

    I hope that Sarah Palin is about to show the Americans can do the same.

    • Denis Cooper
      Posted July 6, 2009 at 8:44 am | Permalink

      I wonder how much Marr is paid to come out with such rubbish … I bet he’d notice if the BBC made a similar mistake working out his salary, and he only got one ninth of what he’d expected.

  14. Freddy
    Posted July 5, 2009 at 2:09 pm | Permalink

    “For the record, abolition of ID cards … is Official Opposition policy as well. ”

    Please could you clarify the policy with regard to the National Identity Register, or whatever they are now calling the giant computer database which will hold all sorts of private details about me, and to which I will have to give information next time I have my passport renewed ?

    For example, will there still be a £1,000 pound fine if I do not tell the state when I move house ?

    ReplyI assume it too will go -that’s what I want

  15. Freddy
    Posted July 5, 2009 at 2:16 pm | Permalink

    Sorry, but I am not very impressed with the extent of your planned cuts.
    I would rather see a requirement for every highly-paid public sector worker be required to reapply for their jobs. It is ridiculous that they should maintain any sort of parity today with the private sector during boom time.

  16. Bazman
    Posted July 5, 2009 at 2:46 pm | Permalink

    Will these pay cuts apply to the bankrupt private sector that in reality is now publicly owned. You do not believe because you do not want to believe. Communism for the few no less. Many of these quangos employ the ‘right’ people doing very little work for large wages. As I have said before what will all the chaps and gels do on Monday when all this state apparatus has been reduced. They will have to get a real job and do some real work. Antique shop/art galleries can only employ so many and wine is getting a tougher game.

  17. Michael Ney
    Posted July 5, 2009 at 3:52 pm | Permalink

    A reasonable plan that has the “leadership” facing responsibility and leading the way in facing the pain. I am a “Public Sector” worker and earn nothing like these amounts. Indeed, most non-teaching staff in Education are paid only when the school is actually open (say again, all after “long holidays”!) and as a result earn the same salary I had working in a call centre ten years ago (but despite the lack of overtime payments, I actually like the post I currently hold). I understand the need for restraint and a reorganisation of the public sector to reduce the “non-jobs” that have been created and considering Mr Brown claimed there would be a “Bonfire of QUANGO’s” when Labour won the 1997 election, there are more than ever and at a cost that the nation cannot bear.

  18. Adrian Peirson
    Posted July 5, 2009 at 6:12 pm | Permalink

    You can’t trim the Quangos, Quangos are how the Despots in whitehall and the EU exhert their micromanipulative control from the top of the Pyramid down to the Base where we the Proles live.
    The state machinery is how a few elites manage to control the whole of society.
    This is how the elites can order us into illegal wars, anyone who refuses is simply replaced by someone who will obey the order.
    quangos are part of the top down control Grid

  19. Posted July 5, 2009 at 6:34 pm | Permalink

    Funny, I was thinking along the same lines last night. I would go for legislationa thet froze all pay rises for those public sector workers (including the BBC, quangos and quasi-state operations such as National Rail) earning over £100,000 while there was a budger deficit and all pay rises for the rest of the public sector while there was a budget deficit higher than the rate of inflation.

    I don’t mind paying public sector bonuses, but these should also go while the government is running a deficit. This is exactly the same as best practice in the private sector where companies generally don’t pay bonuses when they make a loss.

  20. John Borwn
    Posted July 5, 2009 at 6:57 pm | Permalink

    In addition to the formally constituted quango’s there is a need to tackle some of the hidden quangos who pass themselves off as private companies, but are totally dependent on public sector oney for their existence. Take for instance ACPO – what is its role and why does it really need to exist. It is funded by grants from the Home Office and membership fees from senior police officers and police authorities. It develops policy and guidance documents which are promulgated to all the police services in England and Wales – surely this is a function which should be performed by the NPIA (yet another quango). Apparently it is the owner of the data in the PNC and now it has set up a records service to provide criminal disclosure information for visa applications to the US, Canada, New Zealand and Australia. Why it needs to do the latter when we already have the CRB is beyond me – just another opportunity for the public to pay fees to an unaccountable body. Oh and it uses its ‘limited company’ status to exempt its activities from scrutiny via FOI requests.

    There needs to be a fundamental rethink about the need for and accountability of quangos and quango-like bodies. Perhaps the Conservatives should consider a zero-base solution to quangos – abolishing them all and then only recreating those where there is an absolute need.

    Outside of central government there are also quanlgos – e.g. the joint procurement organisations such as ESPO. These are hidden bureacracies which are demonstrably not benefiting the local communities and are used as an excuse by the stakeholding members from the local authories for discriminating against SMEs. These need to be tackled so that some real savings can be achieved in local government procurement.

  21. Jon
    Posted July 5, 2009 at 8:46 pm | Permalink

    A blog from an MP that speaks of sensible ideas. So no doubt nothing will happen in this parliament. Hazel Blears had a 16000 pound a year admin clerk fired for commenting about expenes abuse ANONOMOUSLY. We don’t have a government in power we have an enemy.

    The Tory’s need to discuss the drastic cuts needed. I thought Ian Duncan Smith talkd very good sense. Tell the truth about the state of the finances. Very good advice there as I know John Redwood has been doing. The leadership needs to get more honest about how bad things are.

  22. Mark
    Posted July 5, 2009 at 10:23 pm | Permalink

    All QUANGOs should be required to submit a simple audit – no more than one page statement of activities and objectives; a list of all employees with salaries and expenses in excess of £50,000 p.a.; a budget, and overall staff numbers.

    Some can definitely be disbanded altogether: the NHPAU is one such which has failed totally to understand the drivers of the housing market – it seems to be a fig leaf to support Brown’s pre-crash policies Ponzi scheme of driving house prices higher through ever increasing mortgage lending, financing imports of consumer goods on the “wealth” created. They’re the idiots who were saying that houses were going to increase in “value” by a further factor of 10 over 2007 values (so you’d need to be a multi-millionaire to buy the average house), ignoring the role of migration in population forecasts and myriad other nonsenses. Just one column on housing from Merryn Somerset Webb contains much more common sense than the entire output of NHPAU.

    I’m sure that others can identify similarly useless candidates.

  23. Posted July 6, 2009 at 12:22 am | Permalink

    I would respectfully suggest a different starting point. Rather than looking at what the Quangoes do, I believe we should be looking at what government does; after all quangoes only exist to undertake “work” the government has delegated to them.

    The quangocracy is a symptom of the problem not a cause.

    Close down the health police in their entirety, no more government contributions to charities, half the number of salaried government ministers, no more consultants or advisory committees on anything unless they give their advice for free in a spirit of public service, no subsidies for the arts, no advertising of government projects on television or in the press; the list can go on and on. The size of government must itself be the subject of attack if the reduction in spending is to be anything like enough to pay for the damage done by twelve years of Mr Brown getting every decision wrong.

  24. THE ESSEX BOYS
    Posted July 6, 2009 at 8:01 am | Permalink

    1.” There needs to be a repeal bill to get rid of some of these bodies altogether.”

    Does the opposition have the resources and foresight to have legislation prepared on this and other important matters so no time need be wasted on coming to office and starting to repair the damage?

    2. We mention again our suggestion to get the civil service and the public fully engaged in the savings culture.

    The new government should estimate, quantify and regularly measure and update our progress/success in reducing the cost of the state and the elimination of waste.
    Call it ‘The People’s Piggy Bank’ (‘No more snouts in THIS trough!’) and publish estimates and actual figures monthly in an imaginative way.

    Techniques that we have all used in sales and company incentive schemes should be used unashamedly and so should some of the catchy slogans that we regularly advocate here.
    This is a deadly serious business but to connect with the public and get everyone genuinely onside we shouldn’t use just dry economic language and tired cliches.

  25. Andrew Duffin
    Posted July 6, 2009 at 8:58 am | Permalink

    Like Freddy, I would appreciate clarity from the Opposition on their policy about the ID project.

    We know you’re planning to abolish the cards. The government has now admitted that they will never be made compulsory anyway; however, the cards were never the problem.

    The problem is the database, the all-encompassing hackers’ delight that will hold all sorts of personal information on everyone, be accessible to huge numbers of officials, yet be totally secure, etc etc etc.

    THAT is what we need abolished.

    But I hear nothing definite from the Tory leadership on this.

    I fear a weaselling-out operation is planned, or possibly some retreat along the lines of “the EU made us do it”.

    Please tell me I’m being too cynical.

    I assume we will stop the lot.

  26. DennisA
    Posted July 7, 2009 at 3:52 pm | Permalink

    The Welsh Assembly had a famous Bonfire of the Quangos last year; they absorbed them into the contol of the Welsh Assembly, same people, same function, same cost or greater, no longer quangos.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, He graduated from Magdalen College Oxford, has a DPhil and is a fellow of All Souls College. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.

  • John’s Books

  • Email Alerts

    You can sign up to receive John's blog posts by e-mail by entering your e-mail address in the box below.

    Enter your email address:

    Delivered by FeedBurner

    The e-mail service is powered by Google's FeedBurner service. Your information is not shared.

  • Map of Visitors

    Locations of visitors to this page