‘Botched’ bonfire of the quangos risks wasting millions, MPs warn

A report by the Public Accounts Committee says the Government appears not to have a full grip on the redundancy costs incurred in winding up bodies such as Yorkshire Forward, and may not be gaining real value for money from the sell-off of their assets.

The MPs voice real doubts over the Government’s claim to be saving more than £2.5bn from David Cameron’s “bonfire of the quangos”, concluding the figure is based on incomplete data.

Committee chairwoman Margaret Hodge said: “We have substantial concerns about the robustness of the Government’s claim that its programme will result in administrative savings of £2.6bn.

“This figure is based on incomplete and imprecise estimates from departments on the savings made and costs incurred.”

All eight of the UK’s Regional Development Agencies (RDAs) were wound up last month, with many of their assets transferred to Government departments ahead of their eventual sale. The report questions whether “market value” is being obtained for the taxpayer.

It also highlights redundancy costs following the RDA closures, and suggests some staff may be accepting the money and then going on anyway to work for the Local Enterprise Partnerships (LEPs) which have replaced them.

A spokesman for the Department for Business, Innovation and Skills insisted last night that RDA assets would “normally be sold at market value” and that “best value” would be achieved.

But the spokesman did accept that as LEPs “are not controlled by Government... (and) if they decide to employ a former RDA staff member, then the individual is not required to repay any redundancy compensation they received”.