Friday, October 15, 2010

Lessons From A Damp Barbecue

Are we having fun yet?

Less a bonfire, more a damp barbecue. There is widespread disappointment that yesterday's cull of the quangos wasn't nearly as decisive as originally billed.

In summary, out of 901 quangos reviewed, 380 will remain entirely unchanged, with a further 40 still undecided (ie too difficult to close). On top of that, another 171 will be retained but "substantially reformed", and a further 57 new ones formed from mergers. Overall, out of the original 901, we will still be left with 648. And even among those that are going, many of the functions and staff will simply transfer back to their sponsoring departments.

So was the whole exercise a waste of time?

No, that would be too gloomy. Some of BOM's all-time favourites are definitely going - eg the Audit Commission, the Regional Development Agencies, and the Qualifications and Curriculum Authority. Some praise is certainly due.

But many other old favourites survive. The notoriously profligate British Council survives, as does, ahem, "public service broadcaster" C4.

And those mergers are a worry. We recall what happened to the much mocked Potato Marketing Council (the quango responsible for National Chip Week - see this blog). By 2008 it had become such an embarrassment that Labour merged it into the £50m pa Agriculture and Horticulture Development Board (AHDB). And as far as anyone can see, it's still there, taxing the potato industry £6m pa to fund its half-baked campaigns for more oven chips.

The fundamental point is this: rearranging bureaucratic deckchairs will never save much money. Simply switching the name plates on the front doors will not do it.

What Cam's government has to do is to axe functions. That's the way to save real money.

Take the British Council. It spends an eye-popping half billion per annum on all manner of bizarre cultural enterprises in the far flung corners of the world (of which £250m comes direct from general taxation), and yet nobody has ever been able to show we get value from it. Let's close it altogether and see what happens.

More broadly, as we've blogged before, there are basically only two ways of cutting public spending.

The first is known as "starving the beast". That involves the beastmaster (aka the Chancellor) cutting a fat beast's food budget and hoping that the thing will get itself in shape. That it will make economies by cutting down on cream cakes and other luxuries, and spending its smaller budget on stuff that's really needed. Like broccoli and oily fish.

Beast starving undoubtedly has a role in budget control, especially when prolonged control is required - as now. But the problem with fat beasts is that they may not like broccoli and oily fish. They may go on buying the same old cream cakes and oven chips and end up slumped on the sofa in front of daytime TV and no use to anyone...

Hmm... another metaphor that's spun away from us. The key point is that simply cutting budgets from the top without specifying what functions are being cut risks a serious degradation of frontline services across the board. In a public sector without customer choice and the pressure of competition, leaving the decisions entirely to frontline managers is likely to result in worse services to us, the helpless victims.

Which is why when George announces his long-awaited spending review next week, we must hope we get some chapter and verse. We need to know not just the departmental spending allocations, but also the functions that are being scrapped or privatised.

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