Press release

Government to spend billions less through quangos

Francis Maude today announced that departments are estimating reductions of £11 billion per year in spending through public bodies by 2014-2015.

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

The reductions are part of a cumulative £30 billion reduction over the Spending Review period through the review of public bodies, departmental reforms and the Spending Review. 

Mr Maude also announced tough new rules to restrict the lobbying of government by public-funded bodies. Public bodies will be restricted from carrying out unnecessary or political PR or marketing activity under the new rules.

Francis Maude announced anticipated cumulative administrative savings alone of £2.6 billion from public bodies over the Spending Review period. The minister was responding to a House of Commons Public Administration Select Committee report on public bodies. The government’s response, published today, addresses head-on several misconceptions and inaccuracies in the parliamentary report.

Francis Maude said:

For too long, too many unelected officials have been taking decisions that affect the public and spending billions of pounds of public money. Reform of public bodies is long overdue and our plans will bring about the largest scale changes to the quango landscape in a generation.

People are fed up with a complex system where the ministers they elected could avoid taking responsibility for difficult and tough decisions by hiding behind a chief executive paid more than the Prime Minister. Businesses are fed up of being held up by red tape and bureaucracy.

There should be a clear presumption that an elected, accountable individual takes responsibility for these activities unless there is a compelling reason for it being carried out by an independent body. So we are converting a number of public bodies into executive agencies precisely to make them democratically accountable through a minister.  The Child Maintenance and Enforcement Commission is one example.

A secondary but important part of the reforms is to cut waste. Public bodies will help us to achieve £2.6 billion of cumulative administrative savings across government and divert public funds to essential frontline services.

The reforms also encourage the Big Society by transferring functions from public bodies to voluntary, charitable and social enterprises.

The Public Bodies Bill will enable the creation of a new Waterways Charity, abolish the Regional Development Agencies, replacing them with local enterprise partnerships which bring together businesses and local authorities, and will strengthen and increase the role of the Citizens Advice Bureaux.

Notes to editors

  1. The proposed reforms aim to reinvigorate the public’s trust in democracy and also ensure that the Government operates in a more efficient, business-like way.
  2. The government introduced the proposed reforms in Parliament on 14 October 2010.  The Public Bodies Bill, which will provide the legislative basis for reform, has since been introduced into the House of Lords. The Bill recently left Committee in the Lords and will begin Report Stage shortly, progressing into the Commons in due course.
  3. The proposed reforms cover all of government’s non-departmental public bodies, as well as other bodies such as some non-ministerial departments and some public corporations. Under the reforms, approximately 200 organisations will cease to be public bodies and their functions will either be brought back into government, devolved to local government, moved out of government or abolished altogether.
  4. “Smaller Government: Shrinking the Quango State” was published on 7 January 2011 by the Public Administration Select Committee.
  5. The government response to the Public Administration Select Committee report is published today alongside a Written Ministerial Statement by the Minister for the Cabinet Office which includes an updated list of reforms. The government has also published today a checklist to support departments and public bodies in implementing reform and a summary of the new proposed approach to triennial reviews of public bodies. You can find all these documents on the Public bodies reform resource page.
  6. The savings quoted in the response to the Select Committee are: 1. £2.6 billion cumulative administrative savings will flow from public bodies over the Spending Review period 2. £11 billion reduction in spend by and through public bodies (including capital and programme expenditure) by 2014-2015. If the savings for each year of the Spending Review are taken into account then a cumulative amount of £30 billion will no longer be spent through public bodies through the public bodies review, departmental reforms and the Spending Review.
Published 16 March 2011