How bonfire of the quangos will end up costing Scottish taxpayers millions

By SCOTT MACNAB
Published on 14/06/2012 00:13

A “bonfire of the quangos” aimed at saving taxpayers’ money may have resulted in a £50 million overrun, a public spending watchdog has warned.

The creation of four bodies – Skills Development Scotland, Marine Scotland, Creative Scotland and the Care Inspectorate – from 12 smaller bodies were examined in detail by Audit Scotland.

These were expected to cost about £30m. The study found that the actual cost was at least £42m but may have cost as much as £80m.

The mergers of public bodies in recent years will cut costs by millions of pounds in the long term.

But the £63m saved in the first five years may be dwarved by implementation costs of up to £80m, said the watchdog. The SNP government pledged to cut the number of public bodies in Scotland by a quarter when it came to power in 2007 – although the report found only a 14 per cent reduction was achieved.

It comes as the Scottish Government prepares to merge regional police and fire services into two national bodies. Any delay in filling key roles at the head of merged bodies could damage the early “benefits” they are supposed to bring, the watchdog added.

Auditor General for Scotland Robert Black said: “The experience of recent mergers has shown that it is vital to have strong leadership in place as early as possible. This means important decisions can be made, and the new organisations’ plans and structure can be developed in advance of the merger.

“This has been a weakness in recent mergers, which has resulted in new bodies operating without a clear vision and with important decisions on matters such as goals, business plans and staffing being delayed.”

“Because the recording of costs concentrated on staff costs, the £42m cost to date is likely to be an underestimate of the full cost of the mergers,” the report says.

“The National Audit Office (NAO) also found that the recording of merger costs focused on staff costs, particularly redundancies.

“The NAO highlighted the difficulty of separating reorganisation costs from the costs of ongoing business. It estimated that non-staff costs, for example property and IT, were likely to be at a similar level to staff costs.”

Of the four merged bodies studied, only Marine Scotland and Creative Scotland did any work to calculate non-staff costs, arriving at a combined total of £3.1m.

Scottish Liberal Democrat leader Willie Rennie said the findings undermined the Scottish Government’s case for a single, national police force.

“It is clear that estimates on savings stemming from the centralisation of our police and fire services are merely figures, not facts,” he said.

Labour is calling for an early appointment of the first chief constable of the Scottish police, and the chief officer of the fire and rescue service.

Justice spokesman Lewis Macdonald said: “I hope Kenny MacAskill will now listen, and act to make these appointments by 1 October at the latest.”

A Scottish Government spokeswoman said the number of public bodies has been cut from 199 to 143 since October 2007. She added: “We will consider Audit Scotland’s report carefully.”

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