0131 524 9500 | info@reformscotland.com

\”Think-tank urges abolition of quangos and contracted out services\” – Times

By Lindsay McIntosh

\r\n

Scotland\’s quangos should be scrapped and could be replaced by independently-run organisations which contract out their services to government, a leading think-tank proposed yesterday. The new bodies would be more accountable to the taxpayer and would save public money, according to Reform Scotland.

\r\n

The Edinburgh-based organisation attacked the current system, which sees government policies delivered by bodies such as VisitScotland and Scottish Enterprise, claiming it allowed small, largely unaccountable, groups of unelected individuals to spend public funds virtually unchecked. Under its proposals, they would either be transformed into independent organisations or be taken under direct government control.

\r\n

The SNP administration at Holyrood is currently engaged in its own “bonfire of the quangos” and has drawn up legislation to reform public service provision. It includes measures forcing them to publish more detailed spending statements However, Reform Scotland claimed that this, while being done with the best of intentions, did not go nearly far enough and a fundamental overhaul was required.

\r\n

Its report, Democratic Power, released today, calls for an entirely new system. Author Geoff Mawdsley said: “The paper sets out to end the way so many government decisions are carried out through quangos and instead ensure that power is exercised in a transparent and accountable way, either directly by government or by organisations genuinely independent of government.”

\r\n

\r\n \r\n

\r\n

There are currently 115 quangos in Scotland. Between them, Reform Scotland says, they account for 43 per cent of all Scottish government annual spending — about £13.3 billion.

\r\n

Although the number of quangos has declined over the past 10 years, the number of quango employees has risen by 50 per cent. Even before the current era of tight public spending, there has been fierce criticism of the pay packets enjoyed by the heads of some of the organisations. Bosses have refused to give up their bonuses, despite increasing pressure, and the Scottish government is likely to freeze their salaries.

\r\n

Reform Scotland claims both its alternatives to the existing structure would lead to savings, although it was unable to suggest how much. Mr Mawdsley, director of the think-tank, said there would be efficiencies if a body was brought back into government control, including, perhaps, future staff cuts. Staff would become civil servants.

\r\n

If it were to become an independent body — such as an incorporated firm or a charity, as universities are — it would be contractually bound to be more efficient. It would negotiate with the government to provide services in exchange for funding.

\r\n

Mr Mawdsley dismissed suggestions that such a fundamental overhaul of such bodies would be financially and practically prohibitive because of their complex organisational structure and existing obligations to staff and suppliers.

\r\n

Although the think-tank has not stated definitively what it believes the fate of each quango should be, it has given three examples. VisitScotland, the tourism body, should be reincorporated into government but many of its functions then devolved to local authorities. The National Museums of Scotland, which has charitable status and is responsible for five institutions, should become fully independent. This would allow it to bid for non-governmental funding, according to Reform Scotland. Perhaps most controversially, Scottish Enterprise, the economic agency, would be taken back into the government. The think-tank said this would make the spending of its large funding allocation — £287.3million last year — the responsibility of ministers “and therefore fully accountable and transparent to the public”.

\r\n

A spokeswoman for the agency said it recognised a need for public agencies to deliver more cost-effectively and demonstrate the impact they make. “Over the past few years, we have radically changed our structure, reducing headcount and generating significant efficiencies,” she said. “This has ensured we are working more effectively and more efficiently than ever.”

\r\n

Reform Scotland\’s approach failed to attract the support of the Scottish government. A spokesman said it was convinced that its existing reforms were the right course of action for Scotland. “The Government is making radical and ambitious reforms — bringing together public bodies with similar skills, expertise and processes to create a simpler, sharper and more efficient public sector landscape,” he said.

\r\n

He claimed the administration had already reduced the number of public bodies “ a wider definition than just quangos — from 199 to 161, and that number was set to fall to about 120 by 2011. “Projects already delivered through this agenda are estimated to save taxpayers £127 million between 2008 and 2013; and will deliver annual recurring savings of £36 million each year thereafter, rising to over £40 million annually through proposals in the Public Services Reform Bill, which is currently going through Parliament,” he added.