Treasury examines the cost of quangos

Published on Saturday 4 July 2009 19:54

THE Treasury has announced a review of spending by public bodies as so-called quangos came back under the political spotlight in a battle over future spending.

Chief Secretary to the Treasury Liam Byrne has ordered a detailed breakdown to "make sure every penny of public money goes to front-line services".

His pledge came days before Conservative leader David Cameron, who has made cutting the "astonishing" pay of quango heads a prominent pre-election pledge, is to unveil his own crackdown.

Cameron's spokeswoman dismissed as "total rubbish" a claim by the Cabinet minister that the Opposition had plans to establish at least 17 new quangos if it took power. The numbers had ballooned over Labour's decade in charge, she said, making its pledges to clamp down now laughable – promising detailed Tory plans to cut them would be set out tomorrow.

Labour's Byrne said: "I am determined that every penny of public money goes to front-line services. I've ordered a review of what public bodies do, and how they do it, to feed into the Pre-Budget report in November."

Campaigners say that despite receiving 35 billion a year of taxpayers' money, the non-departmental public bodies exist in a "twilight zone", unaccountable to voters or the market.

Cameron, who will set out his proposals in a speech to the Reform think-tank, has accused ministers of setting up too many quangos. But Byrne said he had identified 17 being proposed by the Tories if they took power, including the Office of Budget Responsibility and an independent aid watchdog.

"David Cameron should tell us why he thinks now is the right time to set up 17 new quangos," he said.

In a recent report, Reform said quangos (quasi-autonomous non-governmental organisations) were "expensive, inefficient and unaccountable" yet carried out more and more public work. Those with executive powers have an average budget of 174 million a year and employ 469 people on average, it said.

The think-tank called for some to be made independent bodies, accountable to shareholders or taxpayers, with others made democratically accountable to local councils, parliament or by being elected.