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Dan Lewis: Tories will reap a reward from voters if Cameron puts curb on the quangos
WHEN – and probably no longer if – David Cameron becomes Prime Minister, he will most likely inherit the worst set of public finances since the end of the Second World War.
And as President Obama's meteoric fall in public support from impossible heights shows, ineffective leadership in the face of a global recession can cost you dear, very quickly.
But if Cameron tackles the UK's failing quangocracy early on in a similar systematic way that Gordon Ramsay sorts out a failing restaurant, as he intimated in a major policy speech yesterday, his re-election chances in 2014-15 will be infinitely greater.
TV watchers of Ramsay's Kitchen Nightmares by now all know the formula; Gordon expresses disgust at the terrible food and elects to shorten the menu, get in fresh local ingredients, upbraid the chef with attitude, barks at the slackers, redecorate with tasteful fittings and furniture, fast forward to a panicky relaunch night, followed by an easing of tension, commercial success and well-deserved praise all round for Chef Ramsay.
I'm sure that Cameron could have a similar systematic attempt at reforming the quangocracy – the low-hanging fruit of our oversize state. It is vast – nearly 800 bodies with combined budgets of about 170bn. No question, there will be some very rich returns from reforming the quangocracy – not just to the taxpayer but above all to the consumer of public services that they provide.
Politically, Cameron is also keenly aware that unlike some other areas of the public sector, the very word quango inspires near universal
contempt among the entire electorate.
So how should he do it?
The questions a future Conservative government needs to assess all quangos on are:
n Do they duplicate work
already performed in the public sector?
n Can their function already be performed by an existing body?
n Are they crowding out private sector activity?
n Are they in receipt of uncontested government contracts?
n Can their functions be contracted out competitively to a private company?
n Can they be relocated to a much lower cost location?
n Can they be privatised?
And then there are governance issues, which is more likely to get the red top media on side. Confidential evidence given to me suggests that far too many quangos regularly breach the seven Nolan principles of public life; selflessness, integrity, objectivity, accountability, openness, honesty and leadership.
For example, we need to know why in these desperate times, so many quango chief executives routinely receive a far above inflation pay-rise and if there is anyone sitting on the board of an agency who is in receipt of grant or contract to an organisation they themselves are part of?
Action on Britain's quangocracy is all the more urgent because
yet again, spending on quangos has rocketed. According to the Cabinet Office's own figures, government spending on the UK's executive agencies rose by 12 per cent from 30.8bn in 2007 to 34.6bn in just one year.
Until yesterday, neither the Conservatives nor the Liberal Democrats had anything to say about it. Meanwhile, this Government has almost given up keeping track of the quangos. Or is it symptomatic of how they have lost control of the public finances or has it taken the
view that to do so is too embarrassing?
The latter would hardly be surprising when then Chancellor Gordon Brown promised a bonfire of the quangos back in 2005 when all we got was a small conflagration of twigs, quickly extinguished by the activities of his fellow Ministers – particularly Ruth Kelly – and his subsequent premiership.
Indeed, the Government's stealthy retreat from accountability for the quangocracy has been in place for five years now.
Starting in 2004, the last annual hard copy directory of quangos was physically published and in 2005, this was downgraded to a pdf computer file.
In 2006, the trend continued with the discontinuation of the Government's own online quango database and a change in the Financial Reporting Manual to the accounting rules so that government spending on quangos or "grant-in-aid" is reclassified as a financing transaction rather than income. That made comparing year-on-year figures very difficult between financial years 2005-06 and 2006-07.
No wonder then that the Cabinet Office chose not to do so the following year and even disbanded the Public Bodies Team – the outfit responsible for keeping track of quangos. Consequently, in 2008, the annual public bodies report for 2006-2007 was scaled back to a mere 30 or so pages from the more usual 400. Expenditure figures were only given for one quarter of the bodies, along with no individual data on any of the quangos as per previous years.
That's why David Cameron would show real leadership in a clear and accountable break from the past by, early on, ordering that the Cabinet Office quickly restores a full annual quangos report.
Of course, not all the failing restaurants Gordon Ramsay goes to work on survive. Well, if Cameron's future government does it right with the quangos, not all of them will either. It will be only too just that some of these profligate bodies display some solidarity and share the proceeds of Britain's recessionary pain.
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