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Don\’t just kill of a few quangos – sweep every one of them away – Scotsman

By Geoff Mawdsley

Governments of different political persuasions have admitted that too many functions and too much power has been delegated to so-called quangos. So, over the years, we have had promises of ‘bonfires of the quangos’, culminating in the present Scottish Government’s drive to streamline public services starting with its Public Services Reform Bill.

While the aim of cutting the number of quangos in Scotland is right, the approaches adopted have not achieved the drastic reduction required.

Reform Scotland’s latest report, Democratic Power, sets out a clear and principled strategy that would end the quango culture. Instead power would be exercised accountably and transparently either directly by government or through organisations which are genuinely independent of government.

This would make it much easier for people to determine whether political power was being exercised in the public interest because it would force government to be open about what it was trying to achieve and how it proposed to do it.

Previous attempts to hack away the undergrowth of government in Scotland, while welcome, have failed because they have been piecemeal and focussed on the wrong target. They have looked at the functions of the different bodies and tried to simplify or merge them to reduce waste and bureaucracy. This ignores the real problem. It is not what quangos do, but the way that they do it that is the problem. Put simply, too much political power in Scotland is currently exercised by 115 quangos or Non-Departmental Public Bodies (NDPBs) which operate in a ‘no man’s land’ where they are neither fully democratically accountable nor fully independent of government. This lack of clarity blurs accountability.

One result is that government ministers can evade their legitimate responsibility or ‘pass the buck’. This was seen clearly in the fiasco over exam results in August 2000. Although pupils’ education and examination was a clear government responsibility, the fact that it was a quango – the Scottish Qualifications Authority (SQA) – which made mistakes meant that the government and minister escaped the blame. This begs the question: Should responsibility for something as important as Scotland’s examination system be left without proper public accountability and transparency?

Quangos also account for a huge chunk of government spending – currently a massive 43 per cent of the Holyrood government’s annual spend. Admittedly, most of this is health board spending, but even if this is excluded, quangos spend over 10 per cent of the Scottish budget. Yet there is a lack of openness and accountability about how this money is spent. This has led to the situation where we have seen a 50 per cent increase in the number of quango employees in the last 10 years, up from 9,900 in 1999 to nearly 14,900 in 2008, despite a decrease in the number of quangos. When you consider this figure does not include public corporations or the NHS, this growth is even more shocking. Further, there is continuing controversy over the amounts paid to many top executives in some of Scotland’s 115 quangos.

But even if there is widespread acceptance that there is a problem, there is little agreement about how to solve it.

Reform Scotland’s remedy is based on a presumption against quangos because of their lack of accountability and transparency. This would mean that all quangos, apart from tribunals such as the Children’s Panel system for which we think there is a justification, would cease to exist altogether. A decision would need to be taken as to whether their functions should be transferred to existing government departments reporting directly to a minister, or the quangos turned into genuinely autonomous bodies. In many instances, this decision could go either way and could lead to some functions of a body being performed by government and others by independent organisations. It would hinge on whether the functions were considered an integral part of government or would benefit from more independent action. The key point is that they would be one or the other, creating a much clearer distinction between what government does directly and what is done by organisations that are independent of government.

In those areas where it is decided that government should act directly, it must be clearly accountable to the public for its actions. This means acting directly through civil servants in its own departments wherever possible.

Without being overly prescriptive, we think that most of the functions of bodies such as Scottish Enterprise, Highlands and Islands Enterprise, VisitScotland and the Scottish Environment Protection Agency could be brought back ‘in-house’ while any residual technical or advisory functions demanding greater independence of action could be performed by independent bodies. Wherever appropriate though, there should be a presumption in favour of functions being performed by local authorities to ensure accountability to local communities.

However, there are functions which would be better performed by an independent body or bodies and, in these cases, government could enter into an open and transparent contractual agreement to achieve agreed outcome measurements. These independent organisations would have to be provided with necessary funding. Advisory bodies such as the Scottish Law Commission, cultural bodies such as the National Museums of Scotland together with health boards, might well benefit from greater independence from government in fulfilling their respective roles. For example, this would ensure that advice given to government was impartial and that health boards could become more accountable to patients.

The proposed changes would bring some much-needed clarity to government in Scotland. History has taught us that a radical reduction in quangos can’t be done in a piecemeal fashion, since ‘bonfires’ turn into damp squibs. It can only be done by adopting a principled approach as a matter of urgency.

Geoff Mawdsley is Director of Reform Scotland