quangos

QuangosIntroduction

Quangos are a fact of public life. Public services and public bodies are continually under scrutiny.

Issues range from the political parties' concerns with public service reform, as well as with public

expenditure and the efficient use of the United Kingdom's resources. Members of the Institute of

Directors (IoD) have commented on them from time to time.

This 'Comment' takes a snapshot of the current state of the quangos in the UK. It also:

asks whether the accountability of quangos has always kept pace with moves to strengthen

accountability in the business world and other sectors;

asks whether some quangos still have a valid role to play;

and warns the Government that creating more advisory bodies to consider new challenges

such as responses to climate change could be seen as a substitute for practical action.

What is a quango?Definitions and numbers may vary according to source, but quangos (quasi-autonomous non-

governmental organisations) are organisations whose board members or the equivalent are

appointed by government to perform a public function.

Quango statistics in 2006 [and in 2004]

883 [839] public bodies sponsored by UK government departments, made up of:

23 public corporations, including 2 broadcasting authorities [9 public corporations

and 2 nationalised industries]

1 [1] Bank of England

23 [24] NHS bodies

836 [803] non-departmental public bodies (NDPBs).

The 836 [803] NDPBs comprised:

199 [210] executive NDPBs

448 [407] advisory NDPBs

40 [34] tribunal NDPBs

149 [152] independent monitoring boards (formerly known as boards of visitors).

There were also 16 [21] task forces, 67 [100] ad hoc advisory groups and 5 [7] reviews.

More than 21 thousand people were reported to serve on these public bodies.

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P U B L I C S E R V I C E S C O M M E N T

I N S T I T U T E O F D I R E C T O R S

According to the Cabinet Office publication, Public Bodies 2006,1

at March 31 of that year there

were over 800 such organisations, as shown above, with comparative figures for 2004 [in square

brackets].2

The Cabinet Office noted in its 2006 publication that there were 27 fewer bodies in 2006

than in 2005, but note that there were 44 more in 2006 than in 2004.

Note that the figures above do not include the counts of all the localised public bodies, such as NHS

trusts, education and other bodies, of which there are thousands in all. More precisely, in the Cabinet

Office compilations some bodies which number dozens or hundreds are counted as one body, e.g.

health authorities. However, other subnational bodies, such as the individual Regional Development

Agencies, are counted individually.

The Government does not tend to use the term quango. The term 'public body' is preferred. Public

bodies (or quangos) come in several forms:

non-departmental public bodies (NDPBs);

public corporations;

National Health Service (NHS) bodies;

public broadcasting authorities.

Continuing this taxonomy a little, NDPBs come in four flavours:

executive NDPBs that employ their own staff and set their own budgets;

advisory NDPBs, which are usually staffed by people from a 'sponsoring' government

department, and normally costs come out of those departments' budgets;

tribunal NDPBs - which operate in a specialised field of law - usually staffed from a sponsoring

department and without their own budgets;

independent monitoring boards (previously known as boards of visitors) of the prison system,

supported by the sponsoring departments.

There are also task forces, ad hoc advisory bodies and reviews undertaken by one or more persons

on behalf of government. These are given a specific issue to work on and are disbanded at the end

of it.

Finally there are very many local bodies such as higher and further education institutions; schools of

various sorts; Learning and Skills Councils; registered housing associations; registered social

landlords and NHS trusts and other bodies.

R U N N I N G H E A D

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Note that none of the above has referred to the mainstream public bodies which rely on the

democratic process to justify and maintain them. These are primarily the UK Parliament, the Scottish

Parliament, Welsh Assembly and perhaps soon the Northern Ireland Assembly once more, plus local

government authorities, with thousands of elected councillors. There is also - within the NHS in

England - a new type of local public body known as an NHS foundation trust, which has elections

for a governing body which acts as part of a two-tier governance model with the rights to appoint

the non-executive directors (NEDs) of the trust board.

Also excluded from this 'Comment' are government departments and non-ministerial departments

and executive agencies, as they are departments or parts of government departments.3

Collectively quangos are responsible for large amounts of public resources. For example, public

bodies had a gross spending total of more than £167 billion in the year ended 31 March 2006.4

In

the year ended 2004-2005 the outturn was £153 billion.5

For comparison, total local government

expenditure on services in the UK for the year 2005-2006 was around £139 billion (estimated

outturn), and £130 billion in the previous year.6

Quangos have over the years attracted attention as to numbers and the facts of their creation and

demise. Looking at the period from 1979 and just considering NDPBs, these have reduced from

2167 in number.7

Over the past quarter century the trend has been to smaller numbers of

organisations. In 1997 the total number of NDPBs was 1128. Since the advent of devolution within

the UK, the UK Government and the devolved administrations have separate powers over the

setting up and oversight of public bodies.8

Public purposesQuangos' functions cover many areas of public life. These include the provision of education and

health services, advising government on issues such as pollution, regulation of business activities,

the investigation of complaints and deciding on disputes (as is done by employment tribunals).

Government in the 21st Century is not a simple matter, some would say, and therefore there is a

need for flexibility for any government to be able to respond to issues of the day by establishing

bodies to provide expertise as it sees fit. Yet government ministries are already able to gain the

services of specialists and others in carrying out their duties, so why go to the trouble and expense

of forming entirely new organisations?

An alternative view is that a government sets up a quango to deal with difficult issues or deal with

them in ways that remove them from public gaze. Some quangos seem to exist to 'deal with' rather

nebulous issues. Adherents of such a viewpoint might say that examples include the Commission

for Integrated Transport or the Sustainable Development Commission.

Ministries such as the UK's Department for Transport already have responsibilities to help deliver

transport improvements, including those around encouraging easier interchange between various

transport modes. So why set up a public body to discuss the notion?

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In the field of sustainable development - which seems useful as a way of thinking about how

humanity deploys the scarce resources available to it - there are again challenges to be addressed.

But setting up a quango to discuss a concept may seem to some people (no doubt of a critical

nature) to be not the best way to optimise the use of public resources. Academic institutions, think

tanks and a whole host of non-governmental organisations (such as many green groups) exist in

abundance, lobbying and working in that area as well as engaging in public discussion. This is not

to mention public bodies such as the Royal Commission on Environmental Pollution, the

Environment Agency and the Scottish Environmental Protection Agency.

There are bodies which, although not stand-alone quangos, amount to standing committees and

have paid members. An example is in the Department for Work and Pensions which has a Decision

Making Standards Committee, which "is a group of independent experts who advise the chief

executives of Jobcentre Plus, The Pension Service and the Disability and Carers Service on

improving social security benefit decision making".9

Although the number of quangos has reduced since 1979 they are still collectively responsible for

resources that are comparable to the combined spending of all of UK local government. The trend

in public spending on these bodies has been up over the same period.10

That fact alone gives pause

for thought when thinking about public expenditure, efficiency and about issues such as

accountability and governance.

Accountability of quangosOne area of concern relates to the accountability of quangos and of their board members. The IoD

is well used to corporate governance issues that affect relations between firms and their

shareholders. Directors are accountable to the latter for the stewardship of the business.

There have been many developments in corporate governance in the business world in recent years.

These, ranging from the outcomes of reports such as the Cadbury and Higgs reports on corporate

governance, were intended to strengthen accountability. Some of the principles have been picked

up in sectors such as parts of the NHS, with the publication of codes of practice and corporate

governance guidance.

Not so in all quangos, some would argue. Board members of these public organisations are not

elected. Ministers may decide on who serves on a quango board. Although many quangos hold

meetings that are open to the public, there is no equivalent to either a shareholders' meeting or to

the election process for local government councillors. A recent exception to that has been the

creation of public benefit corporations - the legal structure that is used in NHS foundation trusts in

England. These have a two-tier system of governance. A board of governors (or members' council)

is drawn from local stakeholders such as foundation trust employees, patients and health interest

groups by a mix of election and by nomination. The board of governors appoints the NEDs on the

foundation trust board of directors.

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One facet of the world of quangos in general is the fact that some quangos nominate quango

members to serve on other quangos. That appears to create a perverse form of corporate

governance and accountability that is not easy to unravel.

The continued case for quangos?

It would be hard to argue that government in any major modern nation should act in isolation.

Governments should indeed harness expertise and resources to tackle the issues of the moment,

and those of the near and longer-term future. Thus in specialist tasks like advising on allocation of

monies for research in science, engineering and medicine, there would seem to be sensible reasons

to call upon and even set up separate agencies funded via the public purse. There are the research

councils which co-ordinate peer review and support processes which form a key part of scientific

endeavour.

Directors' responses to a January 2000 Policy Discussion Paper in IoD Policy11

about quangos and

similar public bodies contained some interesting and thoughtful views about this aspect of public

administration and resource use.

In the consultation with IoD members on the case for continuation of quangos at that time the

answer seemed to be a qualified yes. One comment was that they were a good way of getting

innovative and practical solutions by drawing on skills from outside a "conservative and

uncommercial civil service culture". They could also be useful in carrying out activities at arms length

from the government that do not need great political input, such as certain regulatory functions.

Others wanted a review of quango numbers, as there seemed to be far too many. It was proposed

that advisory NDPBs be drastically cut, beginning with areas in which specialists could readily be

sought to give advice to government on individual issues.

In the same IoD member consultation there were thought to be some examples of bodies that

performed well in health, higher education, industrial tribunals and prison visiting. On the other hand,

there was a perception that there were quite a few poorly performing bodies that had outlived their

useful lives.

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The weakest link?

It can be an easy sport to single out some quangos. Yet governments should not flinch from

continual examination of the deployment of public resources, most of which derive from the

enterprise and efforts of business. Efficient businesses do not keep in being units which are either

inefficient or have outlived their useful purpose. To do so could threaten the very existence of the

business as a whole. The same principles should apply to public service reform: lest the concept of

public bodies become only as strong as its weakest link.

So, notwithstanding the diminution in numbers of quangos and of plans for future mergers, why do

these bodies mentioned below exist (to choose just some examples), whatever may have been the

reason for their creation? Weblinks are given so that the reader may make an independent judgement

on the basis of information available.

British Potato Council [sponsored by the Department for Environment, Food and Rural Affairs

(Defra)]. This develops and promotes Britain's potato industry. See www.potato.org.uk.

The Government Hospitality Advisory Committee for the Purchase of Wine (in the Foreign and

Commonwealth Office). This advises on the purchase of wine for government hospitality:

established in 1922. It has zero expenditure. See page 221 of Public Bodies 2006 (via:

w w w . c i v i l s e r v i c e . g o v . u k / o t h e r / a g e n c i e s / p u b l i c a t i o n s / p d f / p u b l i c -

bodies/publicbodies2006.pdf).

The Millennium Commission [sponsored by the Department for Culture, Media and Sport

(DCMS)]. From its website: "The Millennium Commission assisted communities in marking the

close of the second millennium and celebrating the start of the third. The Commission used

money raised by the National Lottery to encourage projects throughout the nation which

enjoyed public support and would be lasting monuments to the achievements and

aspirations of the people of the United Kingdom." See www.millennium.gov.uk.

School Food Trust (Department for Education and Skills). "Its remit is to transform school food

and ... improve the quality of food in schools". See www.schoolfoodtrust.org.uk.

Theatres Trust (DCMS) acts as a statutory consultee on planning applications affecting land on

which there is a theatre and promote the protection of theatres. See www.theatrestrust.org.uk.

Generally, the opinion was that there should be greater openness. One IoD branch discussion led to

the comment that, "Just because a Quango has members of the public serving on its committees

… or main board, does not mean that it is accessible and accountable". In practice, directors have

valuable experience to offer "given their expertise at setting strategic objectives and delivering results

- that's real accountability!" Furthermore, board members should have the same level of

accountability to the public as company directors have to their shareholders. Some contributors to

the debate wanted there to be elections to quango boards, especially for the more powerful and

high profile bodies, although the practicalities of doing this would need to be considered. Having

elections to nearly 900 public bodies could produce electoral fatigue, at a time when democratic

participation in traditional parliamentary and local council elections has been on the wane.

Nevertheless there may be a political climate in coming years to take devolution of accountability to


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some aspects of local government, judging about some of the debate on further public service

reform.12

Back on the numbers front, to be sure there have been continued quango mergers. For example

NHS Estates was wound up in October 2005 and its core functions brought into the Department of

Health (DH), others being devolved to NHS bodies. The Health and Safety Executive (HSE) is in the

process of absorbing several other public regulatory bodies, to become one of seven thematic

regulators. From the point of view of the outside world that approach, which followed the Hampton

Review, should also make things simpler; reducing the potential number of bodies to be contacted

in this specialist field. The Hampton and Better Regulation path of consolidating 31 of 63 regulators

by 2009 also seems to be a move in the right direction that should well be emulated in other key

public services.

The IoD has in recent years encouraged more autonomy within public bodies and more

accountability. The trouble is that in many realms - health, education and local government, for

example, there are still very many such bodies with overlapping responsibilities and, it seems, long

life and longstanding offices. A focus group of IoD members that met at the IoD headquarters in

London to discuss local government and public services in September 2006 threw up consideration

about overlapping of some public organisations' responsibilities - a comment not necessarily

confined to quangos.

One logical extension of more autonomy (it was called 'earned autonomy' in NHS reform) is that

public bodies should take on more responsibilities themselves. That requires a greater move

towards becoming fit for purpose in being able to conduct their own affairs in terms of management,

direction and with adequate accountability arrangements. It should, however, lead to far less need

for the plethora of external bodies that are somehow meant to deliver improvements within the

public services. If the organisations themselves become more effective and efficient there should

surely be less need for entities such as the Improvement and Development Agency13

and the

Standards Board for England14

(both bodies are in the realm of local government) and the NHS

Institute for Innovation and Improvement.15

Some well-known German political philosophers of the 19th Century asked whether the State would

wither away. Perhaps the same question should now be posed about many of the quangos,

particularly as their control of public resources now collectively exceeds many of the local and

democratically accountable bodies such as local government.

Long before Gordon Brown became Chancellor of the Exchequer he called for a "bonfire of the

quangos", speaking in the context of devolution.16

While noting that the number of quangos is well

down on what it was in 1979 or 1997, there is still a tendency for the Government to turn the quango

creation handle whenever a new piece of public policy looms.


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For instance recent Government discussions about climate change seem to be heading in a

direction of creating at least a greenhouse gas monitoring committee (if not a full-blown public body),

if remarks from Defra are anything to go by. The Government intends to create an independent body

(the Carbon Committee, it is suggested) to monitor carbon dioxide emissions, according to plans to

be set out in a Climate Change Bill.17

Is that really necessary? Could not existing resources within

Defra and elsewhere in government and the civil service be deployed in place of setting up yet

another public sector environmental body? In responding to climate change action is needed

instead of what could easily turn into a lot of hot debating air.

Geraint DayHead of Health and EnvironmentFebruary 2007

Note: The author takes part in HM Government’s Health, Work and Well-being National Stakeholder

Council and Defra’s Business Resource Efficiency and Waste Programme (BREW) Waste Protocols

Project Advisory Board. He was formerly a member of SMEs [Small and Medium Sized Enterprises]

Subgroup of the UK Round Table on Sustainable Development. That body was dissolved prior to the

creation of the Sustainable Development Commission. He was a member of the DH's NHS

Foundation Trusts External Reference Group on Governance (also wound up), and a member and

chair of Swindon and District Community Health Council (CHC). The DH abolished CHCs in late

2003. He also served on the HSE's Business Involvement Programme Board (now disbanded). No

remuneration is or was associated with any of the posts mentioned.

Acknowledgment: Thanks are due to James Walsh (Head of Public Affairs, IoD), for some

comments as to content.

References

1Taken from: Cabinet Office, Public Bodies 2006, London, 2006. To be found at:

www.civilservice.gov.uk/other/agencies/publications/pdf/public-bodies/publicbodies2006.pdf. This and previous years'

publications also contain a directory of public bodies.2From Cabinet Office, Public Bodies 2004, London, 2004.

At: www.civilservice.gov.uk/other/agencies/publications/pdf/public-bodies/publicbodies2004.pdf.3For these bodies see: www.cabinetoffice.gov.uk/ministerial_responsibilities/?OpenFrameSet.

4Cabinet Office, Public Bodies 2006, London, 2006, Table 6, p xii.

5Cabinet Office, Public Bodies 2005, London, 2006, Table 6, p xxii.

6HM Treasury and National Statistics, Public Expenditure Statistical Analyses, Table 5.10, p 79, The Stationery Office,

Norwich, May 2006: www.hm-treasury.gov.uk/media/375/5A/cm6811_comp.pdf.7Taking figures given in the 'Statistical Summary' of Public Bodies 1998 (at www.archive.official-

documents.co.uk/document/caboff/pb98/contents.htm).8See, for Scotland and Wales: www.scotland.gov.uk/Topics/Government/public-bodies/introduction and

www.wales.gov.uk/recruitment/pubapps-e.htm, respectively.9'Public Agenda', p 17, The Times, 26 September 2006.

10See for example 'Statistical Summary' in Cabinet Office, Public Bodies 1998, The Stationery Office, 1998, at

www.archive.official-documents.co.uk/document/caboff/pb98/statsum.htm.


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11'Quangos', IoD Policy, January 2000, p 4 IoD, London. Comments from IoD members were summarised in 'The quango

state we're in', IoD Policy, April 2000, p 4.12

For example, some ideas set out by the Department for Communities and Local Government in Strong and Prosperous

Communities - The Local Government White Paper, The Stationery Office, Norwich, October 2006:

www.communities.gov.uk/index.asp?id=1503999.13

See www.idea-knowledge.gov.uk.14

See www.standardsboard.co.uk.15

See www.institute.nhs.uk.16

"The real alternative to secretive, centralised, bureaucratic government - the Whitehall question - is a bonfire of the

quangos and greater democracy and decentralisation within the United Kingdom", remarks made by Gordon Brown MP to

the Labour Finance and Industry Group in 1995 and reported by Joy Copley, 'Brown upends devolution debate', originally

in The Scotsman, 13 January 1995. See http://heritage.scotsman.com/videos.cfm?vid=39.17

James Sturcke, 'Climate change bill to balance environmental and energy concerns', Guardian Unlimited, 15 November

2006: http://environment.guardian.co.uk/climatechange/story/0,,1948346,00.html.


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quangos

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