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Dave can’t govern unless he destroys the quangos

Dennis Sewell on how the agencies stuffed full of Labour placemen have taken power in Britain. To govern properly, Cameron will have to take immediate, brutal action against them

2 September 2009

12:00 AM

2 September 2009

12:00 AM

The closer David Cameron gets to the election, the more he may come to realise how short-lived the elation following his victory may be. Defeating an exhausted Labour party will be the easy part. Winning real power will be a separate, longer battle — and one that requires him to outwit an enemy far more cunning and resilient than Gordon Brown. To transform Britain means seeing off the cronies, placemen and political stooges with whom the government has packed the boards of Britain’s quangos.

Over the Labour years these groups have swelled from an irritant into a state within a state. With 700,000 employees and boards that read like a who-was-who of the Blair/Brown era, the quangos will represent Labour’s stay-behind fifth column. Not only are the quangocrats implacably opposed to the Conservatives’ reform programme, but they are better placed than even the wiliest Sir Humphrey to thwart change and mount a guerrilla insurgency against public spending controls.

To go to war with some 1,160 disparate organisations may strike Mr Cameron as a tiring diversion, but he should remember what he has promised the British public: change. It is a word he used no fewer than 20 times at the Tory conference last year and he has used it at every opportunity since then. More even than Tony Blair and Barack Obama before him, Mr Cameron has held out the promise that his victory will inaugurate a thoroughgoing transformation of government in Britain. He will be judged by his ability to deliver on such an emphatic promise.

The electorate’s fury after a dozen years of Labour failure extends beyond a score of guilty ministers around the cabinet table. The public are thoroughly fed up too with the smug, preachy, arrogant and largely unaccountable class who are in day-to-day command of so much of national life. The maddening regulation, the endless network of agencies making a mare’s nest out of everything from exams to hospital standards — all of these are rooted in the quangos. To postpone picking a fight with the quangocracy will be to surrender to the status quo.

Back in 1997, Tony Blair certainly had no qualms about shooing out yesterday’s men and replacing them with diverse embodiments of modernity. Under cover of his ‘Big Tent’ and employing distracting rhetoric about reaching out across the political divide, he began what soon looked to Conservatives like a soviet-style purge. By the end of the year John Maples, the party’s then health spokesman, was calling for an independent enquiry into why trusted and experienced members of NHS boards were being turfed out to make way for Labour councillors and failed parliamentary candidates.

A new establishment was being created —  one exemplified by Dame Suzi Leather. Until 1997 she had been working as a freelance consumer consultant (whatever one of those may be — perhaps the third sector’s equivalent of a personal shopper?). She was then made chair of Exeter & District NHS Trust, thence to deputy chair of the Food Standards Agency, chair of the Human Fertilisation & Embryology Authority, and via the School Food Trust and sundry other public offices to her present eminence as chair of the Charity Commission, where her avowed Labour party membership alarms the heads and governors of private schools who fear losing their charitable status.

Dame Suzi may have appeared from nowhere, but many senior public appointments have been filled by former Labour ministers. David Clark got the Forestry Commission, Chris Smith the Environment Agency, Geoff Rooker the Food Standards Agency. Larry Whitty, the party’s former general secretary, is chairman of Consumer Focus (where Dame Suzi is a fellow board member — that freelance consumer consultancy experience came in useful after all). Baroness Morgan won a seat on the board of the Olympic Delivery Authority, Lord Warner went straight into a paid NHS chairmanship. The list seems endless.

The quangos are far more than just a useful retirement pasture for clapped-out political donkeys. Take the Big Lottery Fund, where it recently emerged that five out of 12 members, including its chairman Sir Clive Booth, had backgrounds in Labour activism. A Sunday Telegraph investigation into how fairly lottery money was distributed found that of the 117 parliamentary constituencies attracting substantial grants, 74 were Labour and just 20 held by the Tories.

Until Labour lost power in Scotland, the public appointments carve-up was even more shameless north of the border. Labour councillors and parliamentary candidates were frequently appointed to well-paid positions on Scottish quangos. Some even managed to live entirely off the public purse by building up a portfolio of appointments. One married couple (both former Labour activists) were found to be taking home £86,000 per annum between them for sitting on the boards of public bodies. The political bias was blatant. Among those Scottish appointees who declared a party affiliation in 2005, Labour members outnumbered SNP members by more than ten to one.

When not personally pocketing public money, the quangocrats are frequently to be found passing it on to their ideological soulmates in the left-leaning think-tanks. Demos, the IPPR and the New Economics Foundation have all been recipients of large sums from public bodies. Some quangos even retain political consultants to represent them at Westminster. Thus the taxpayer finds himself giving money to a government that passes it to a quango, which in turn hires a lobbyist to press the government to raise more money from the taxpayer to pass to the quango, and so on ad infinitum.

None of this would, perhaps, be very surprising if it weren’t for one salient fact: Labour has legislated to scrap political patronage. The bad old practices of cronyism have supposedly been outlawed and public appointments — with a small number of specified exceptions — are nowadays made according to the Nolan Principles, chief among which is that they must be decided entirely on merit. Independent assessors, accredited by a Public Appointments Commissioner, supervise recruitment.

The NHS even has its own dedicated fairness bureaucracy — the Appointments Commission — to guarantee objective assessment. There are formal procedures to follow, detailed person specifications are issued, and transparent selection criteria observed. Bizarrely, all this has made matters worse, not least because aiming to achieve political balance on the boards of public bodies is itself a practice expressly forbidden by the selfsame rules.

Yet card-carrying, politically motivated placemen represent probably less than half of the problem. Even more sinister is the way that the new recruitment practices ensure that even the politically non-aligned appointees have a bureaucratic, centralising mindset. A creeping credentialism threatens to circumscribe ever more narrowly the pool of potentially successful applicants for senior appointments. The loyalty required is not so much to the Labour party itself, but to the bureaucratic method.

Preferment goes to those already established within the system, and those joining public bodies from outside tend to be either the sort who have been schooled by one of those faintly repellent leadership organisations such as Common Purpose, or have been recruited from the big accountancy and management consultancy firms, most of which have been complicit in this government’s serial failures.

The recruitment advertisements make abundantly clear what sort of candidate is welcome and what sort is not through their insistence that successful candidates must display a commitment to conventional left-wing pieties. Even where there are no actual Labour stooge
s in place, the organisational culture of most quangos renders them inherently inimical to the Conservatives’ reform project.

Previous Tory governments facing a similar problem on coming into office have tried to repay Labour in kind, booting out those suspected of socialist sympathies and replacing them with the Lord Lieutenant’s cousins. That would not be David Cameron’s style, but the Notting Hill equivalent — hiring a new generation of Conservatives schooled in social entrepreneurship — is no longer a course open to him. He cannot change the membership, even if he were minded to.

By the simple ruse of stripping away the Prime Minister’s powers of patronage and establishing an independent appointments system, the Labour nomenklatura have dug themselves in for the long term. Many of the most ideologically hostile quangocrats have notionally won their positions on merit and the legal obstacles to their extirpation could be immense.

Ever since the 1970s, politicians have been promising drastic action against quangos. Margaret Thatcher called for a cull, Tony Blair vowed to ‘dismantle the quango state’, even Gordon Brown once promised a ‘bonfire of quangos’. Yet they have more staff, power and money than ever, with 18,500 people serving on their boards. The Tories talk about reducing the number of quangos, but this will not be enough. Their number has fallen under Labour — but only because they have amalgamated and grown stronger still.

The reason that quangos continue to flourish despite all this is simple: until now they have been regarded by politicians in opposition as corrupt, but by politicians in government as convenient. Now, though, Labour has changed the rules of the patronage game and they will no longer be convenient to an incoming Conservative government; they will be an active menace.

David Cameron discussed quangos in a somewhat ambivalent speech in July. He acknowledged that there were too many of them and that some would have to go. He revealed that he had instructed the shadow cabinet to examine every public body in their portfolios and consider whether they are really necessary. Yet at the same time he signalled a reluctance to undertake a full-scale purge and showed little sign of appreciating the scale of the threat he faces.

Others within his party are urging more vigorous action, arguing that the quango culture cannot be reformed and they must be destroyed. The Centre for Policy Studies recently released a compelling manifesto for the abolition of 11 education quangos, which would save the taxpayers some £630 million. This is just the start of questions that can be asked. If we have an Environment Agency, why do we also need an Energy Savings Trust, environmental campaigns, Environwise and an Air Quality Standards? What, precisely, has been achieved by the Regional Development Agencies after ten years and £15 billion of taxpayers’ money?

Seeking to reform quangos is pointless: this is the lesson of the last Tory government. Abolition is the only effective tool and one which would not just save billions and reduce the deficit, but also simplify government. All these things Mr Cameron says he wishes to do. But at some stage he will have to fight to get what he wants. To put off a battle with the quangos now means he will face an even tougher fight later.

Eighteen months ago a back-of-the-envelope plan for Mr Cameron’s first hundred days might have included significant tax cuts, a green light for Michael Gove’s Swedish schools plan, bold reform right across the public services and some eye-popping initiatives to show that the incoming premier is in earnest about recalibrating the relationship between the individual and the state. To listen to Mr Cameron now, it seems his government will be totally preoccupied with imposing discipline on public spending and repairing the public finances.

Postponing a fight with the quangocracy would be a serious mistake. Unless Mr Cameron is prepared to slash the institutional base from beneath their feet, his much-promised change will never be safe from saboteurs. He has promised nothing less than a fundamental transformation of government. It is a bold and welcome promise. And how he deals with the quangos will tell us how serious he is about keeping it.

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