Monday, July 06, 2009

Dave Needs A Bigger Axe

Still not big enough Dave

I'm sure Dave means well. And I've been assured by people who know far better that me, that once in power, he's really going to go for it.

But try as I might, I remain unconvinced by too many of his big set-piece pronouncements on fiscal policy. Too often, there's a gap between his high level rhetoric on downsizing government, and the delivery of clear bankable pledges.

I've just read his much trailed speech on quangos, and I had expected some serious axe-work. But what I actually found was just another round of deckchair rearrangement.

He starts well enough (and see this useful Times graphic summarising the costs of 33 large quangos):

"Official figures show that last year, the quangos we know about accounted for over £34 billion of public spending, and received a twelve percent increase in funding. To put that increase in perspective, our armed forces - fighting an ever-ferocious and resourceful enemy in Afghanistan - got a three percent increase."

Yes, shocking. And as the TaxPayers' Alliance has pointed out, once you take account of the vast and shadowy array of near-quangos, the real cost of these unelected unaccountable bodies is even higher. Dave goes on:

"Estimates suggest that when you take into account all official and unofficial unelected organisations in our country, the true cost could be more than £64 billion a year. That's more than half the NHS budget and nearly ten times the international development budget.

The truth is we'll never get control of public spending unless we get control of quangos. Their casual attitude to public money is reflected in quango pay. Last year, sixty eight quango heads paid themselves more than the Prime Minister."

Spot on, bro. But what are you going to do about it? Will you actually deliver that Bonfire of The Quangos promised by one G Brown back in the nineties?

Not quite:

"It would be far too simplistic for me to stand here and announce some kind of 'Bonfire of the Quangos.' People have heard that kind of talk many times before, and seen little to show for it. Instead, we need a more sophisticated approach.

Yes we need to reduce the number, size, scope and influence of quangos. But we also need to recognise that there are circumstances where functions of the state do need to be carried out independently of elected politicians."

"Sophisticated"... hmmm. That's a word that always makes me nervous.

And "circumstances"... like, what kind of "circumstances" exactly?

Dave cites three:

  • TECHNICAL CIRCUMSTANCES - "when a precise technical operation needs to be performed to fulfil a ministerial mandate. In these circumstances the public needs to know that people with the right training, professional knowledge and specialist skills are carrying out the work".
  • IMPARTIALITY CIRCUMSTANCES - "where it may be right to delegate power to an independent body when there is a need for politically impartial decisions to be made about the distribution of taxpayers' money. In areas like the arts and science, the public expects funding on merit, not favouritism."
  • TRANSPARENCY CIRCUMSTANCES - "where there is likely to be a need for independent action is when facts need to be transparently determined." EG the independent Office for National Statistics.

Now, the transparency circumstances we agree with - we definitely need independent scorekeepers for things like the economy and the fiscal outlook. So a big tick on that.

But as for his other two circumstances, we don't buy them at all.

On the technical circumstances, of course government needs to employ technical experts - everyone agrees with that. But why should they be employed in an unaccountable quango rather than directly?

Dave cites the Bank of England as being an example of an expert body doing a fine job managing our interest rates because they are arms length. Except that it now turns out they didn't do such a fine job after all - they permitted the growth of a credit bubble to end all credit bubbles, and we are all now paying the price. Sure, you can argue about why they failed - like maybe they had the wrong mandate - but it's not really the strongest endorsement of rule by independent expert.

And on the impartiality circumstances, all we can say is WTF?

Why should taxpayers be happy with a bunch of "experts" dishing out their hard-earned cash to the Royal Opera House, just because these experts happen to enjoy opera? Or doling out grants to all kinds of dubious social research projects in our universities? Or indeed, deciding which particular drugs we are to be given on the NHS, and which we are to be denied?

Surely everybody understands that all of these judgements are ultimately subjective, so why should we be happy being dictated to be unelected "experts"? After all, the only sliver of control we've got over the entire bloated edifice is our ability to turn the rascals out. And with unelected experts we can't even do that.

No. To have any hope of gripping the waste and profligacy in quangoland, Dave needs to forget all about sophistication. He needs A Great Big Axe.

An Axe that says all quangos are hereby abolished, and their functions either abandoned or subsumed back into their sponsoring departments. Their budget allocations go back into the departmental spending pot, and are subject to the departmental spending cut.

The only exceptions will be the following:

  1. Office for National Statistics - reporting to Parliament not Whitehall
  2. Office of the Budget - ditto
  3. National Audit Office - ditto

Yes. OK, there may be one or two others as well (see here for a good summary by Andrew Haldenby, the Director of Reform, and this by Ed West).

But going forward, the default position is no quangos.

No spending without representation.

UPDATE (7-7) - Last night's Newsnight covered Dave's speech, drawing extensively on input from the TPA. Not only did they quote the TPA's figures for spending on quangos, but they also had the TPA's Susie Squire in their report package, and the TPA's Mark Wallace in the studio discussion. Both managed to make the key point - Dave's on the right track, but still has to be tougher. And there was more - the TPA's Matt Sinclair trying to persuade Newsnight's Dragon's Den style politics panel to abolish the Regional Development Agencies. Sadly, he failed. But then, given that the 4 person panel includes an ex-quangocrat, an ex-Labour minister, and an ex-Labour policy advisor, that's not terribly surprising. Anyway, to have Newsnight drawing so heavily on TPA input really does show how far the wheel has turned... all the more reason for Dave to be bolder.

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