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Reforms to quangos will deliver millions in savings

The Department for Communities and Local Government’s plan to increase accountability by reducing and reforming its quangos is on course to …

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

The Department for Communities and Local Government’s plan to increase accountability by reducing and reforming its quangos is on course to deliver around £170 million savings Communities and Local Government Secretary Eric Pickles said today.

To coincide with the Government’s response to the Public Administration Select Committee’s report, the Department is taking the opportunity to update on its own reforms for scaling back its Arms Length Bodies and reducing the running costs of those that remain.

DCLG is reducing the number of departmental Arms Length Bodies from twenty-six to nine. The remaining bodies are putting in place measures to increase efficiency including securing better value for money when buying goods and services and reducing running costs wherever possible. Taken together, it is anticipated that around £170 million will be saved from DCLG’s budgets by 2014-15 with a further £60 million saved from the budget for Local Government spending.

Table: DCLG Budgets

Table: Local Government Budgets

Communities and Local Government Secretary Eric Pickles said:

We are scaling back the quango state, increasing accountability over decision making and in the process saving the taxpayers hundreds of millions of pounds. By streamlining the layers of bureaucracy we will not only make government more effective but also more efficient.

It has been estimated that the disbanding of the Audit Commission will save the taxpayer over £50 million a year. This will include saving the central and corporate costs of the Audit Commission, currently paid for by the Commission’s fees including a surcharge on audits, including those by private firms. In addition, councils will be able to appoint their own independent external auditors from a more competitive and open market among audit firms, reducing costs.

In July last year the Department for Communities and Local Government announced the closure of the eight Government Offices for the regions across England. The measures are central to the Government’s wider aims of transferring power from central government to councils and communities and the closure is expected to deliver savings of up to £200 million over the spending review period. These figures are in addition to the anticipated savings from the Arms Length Body reforms.

As well as changes to Departmental quangos DCLG is also committed to cutting out waste, reducing overheads and increasing efficiency at the centre.

The commitment to saving taxpayers money is supported by the monthly publishing of all spending over £500 online monthly. This is helping to ensure that both the Department and its quangos operate as transparently and economically as possible.

Notes to editors

1. The Department is reducing the number of Arms Length Bodies from twenty-six to nine. Each body was considered individually with the Government considering the arguments in each case for retaining or abolishing the body.

2. The four Non Departmental Public Bodies wound up in 2010 were:

  • National Tenant Voice and the National Housing and Planning Advice Unit (these are both shown in the table as abolition will result in a saving over the spending period)
  • Advisory Panel on Standards for the Planning Inspectorate and Local Innovation Advisory Panel (which are not shown in the table as there are no costs or savings attached to these)(1).

None of the four required any legislation and were wound up by way of administrative action alone.

3. There are a further 12 bodies which we expect to be either abolished or transferred by April 2012. One body, the Leasehold Advisory Service remains under review which will report in April 2011.

4. The tables do not include the Audit Commission(1). The Government announced in August plans to disband the Audit Commission and move the work of its in-house audit practice into the private sector. The disbanding of the Commission will require legislation, which the Government will introduce at the earliest opportunity. Savings in the period to 2014-15 will depend on the timing of this legislation and the detail of the new local audit framework, on which we will shortly be consulting.

5. The Planning Inspectorate(1) is not included. As an Executive Agency, it is not within the scope of the Cabinet Office’s Public Bodies Review and budgets are still in the process of being agreed.

6. Further detail on savings relating to individual Arms Length Bodies can be found here: (MS Excel, 50 kb).

7. As part of a general drive to ensure value for taxpayers money, Ministers have also instructed all Department quangos to cancel their contracts with lobbying firms. This has resulted in Ordnance Survey and the Tenants Services Authority cancelling their contracts. The Audit Commission’s lobbying contract ended in February 2010. Ministers believe that using taxpayers’ funds on local government campaigns or to lobby government wastes public money as it gets used beyond the local area; public policy is weakened when conducted by private lobbying firms.

8. The Cabinet Office is today publishing, for the first time, estimates of the total savings achieved by the Government through the closure and reform of its public bodies. Detail can be found on the Cabinet Office website: (external link).

  1. These figures are estimates based on the administration budgets for running costs and restructuring for the Arms Length Bodies. They are subject to change as estimates on costs become firm. Calculation of savings follows HM Treasury guidance methodology and uses updated GDP Deflators post SR10 settlement. These savings figures are not directly comparable to savings figures from the SR10 announcement in October. These figures do not include potential pension crystallisation costs.

  2. The Valuation Office Agency is an Executive Agency of HM Revenue and Customs. The funding in the table is provided by DCLG for work on Business Rates and Council Tax valuations.

(1) In addition to the bodies mentioned above, the remaining bodies not shown in the table are the self funding bodies - the Queen Elizabeth II Conference Centre; the Fire Service College; Ordnance Survey; the Architects Registration Board, and the Independent Housing Ombudsman.


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Published 16 March 2011