So it is goodbye to the Payment Systems Regulator, which will be merged with the Financial Conduct Authority. That is not a huge breakthrough for the nation in itself – it merely means that the likes of Visa and Mastercard will have a different telephone number to ring when they want to organise a bit of lobbying. But it is, Keir Starmer wants us to know, just the beginning. Just as he promised on Monday to chop the benefits bill, the Prime Minister wants us to know that he now has quangos in his sights.
To be fair to him, he does seem to appreciate the problem with ‘quasi-autonomous non-government organisations’, to give them their full name. It is not just a matter of public money being splurged on salaries, first-class tickets, hotels and all the other things that quangocrats enjoy. The rise of quangos has been driven by a desire on the part of ministers to avoid accountability. Create a water regulator, for example, and you don’t have to answer directly for the failures of Thames Water. Create a rail regulator and you can palm off onto them the responsibility for dealing with strikes. Instead, when public services fail, a minister blames the quango – or can even call for its head to resign. Taxpayers are coughing up to employ a very expensive form of human shield.
‘For too long, the previous government hid behind regulators – deferring decisions and allowing regulations to bloat and block meaningful growth in this country,’ Starmer tells us. That is all correct except for his attempt to restrict the phenomenon to Conservative governments. The Blair and Brown governments were masters at it too. Just look at the Sentencing Council, created in the last few months of Gordon Brown’s government. When it recently emerged that the Council was ordering judges to take into account criminals’ ethnicity and sexuality before sentencing them, Justice Secretary Shabana Mahmood barked at it and described it as unacceptable. The guidelines will very likely survive unchanged, but Mahmood has been able to deny that the policy had anything to do with her or anyone else in government – even though the liberal instincts of the Sentencing Council are no doubt quietly cheered on by many in the Labour party.
Starmer’s big problem, though – as the Conservatives have pointed out – is that the government has spent its first eight months creating new quangos left, right and centre. The Tories name 27 of them, including Great British Energy, the Independent Football Regulator, the Regulatory Innovation Office and the Solar Taskforce. In addition, the Employment Rights Bill will create a Fair Work Agency. None create quite so much despair in me, though, as the new Office for Value for Money (OVfM), which Rachel Reeves announced in her October Budget. Don’t we already have a National Audit Office? One of the first jobs of any cost-cutting exercise, surely, is to identify areas of duplication. In which case, will the OVfM, in its first act, abolish itself?
The OVfM has shades of the Office of Tax Simplification, which George Osborne created in 2010, in the middle of the Coalition’s supposed ‘bonfire of the quangos’ – and stands as a reminder to the Conservatives that they are as embroiled in quango-creation as their opponents. As an indicator of its success, the 2009/10 edition of Tolley’s Tax Guide – the accountants’ bible – had 867 pages. By the 2023/24 edition – when the Office of Tax Simplification was abolished – it had grown to 1,020 pages. If Osborne wanted simpler taxes, why didn’t he just make them so, given that he was Chancellor? The role of the quango was not so much to make taxes simpler as to create the impression that that was what he was doing.
Sorry, but I don’t believe that Starmer’s own bonfire of the quangos will be any different. It is just a PR exercise, designed to cover up what the government is really doing, which is to create even more jobs funded from the public purse – and to evade accountability in the process.
Comments