Dennis Sewell

The quango state: how the left still runs Britain

David Cameron’s government continues to subsidise its enemies

The quango state: how the left still runs Britain
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[/audioplayer]Last week Sally Morgan reverted to type. After almost three years as a model of cross-party co-operation, instinctive Labour tribalism finally won out as she accused Downing Street of purging Labour supporters from high offices. Of the many Labour types appointed by the coalition into quangos, she was probably the last person the government expected to go hostile. Not only had she done a fine job chairing Ofsted, the schools inspector, but she was a proven reformer who certainly shares Michael Gove’s passion for new schools. Like many Blairites, she is something of a Goveite at heart. But now, with just over a year to go until the election, personal loyalties are giving way to raw expediency.

That goes not just for the Labour cuckoos in the governmental nest, but for the Liberal Democrat coalition partners too. Until now they have been like the 1950s Egyptian general who swore to remain loyal to President Nasser ‘until the day for treachery arrives’. With their opportunistic exploitation of the Baroness Morgan moment, Nick Clegg and David Laws have signalled that the day has now dawned. Their polling tells them that Michael Gove is the pantomime villain of the particular demographic whose votes they covet, so they will accuse the education secretary of wanting to draft in Tory ideological stooges whether they have good grounds to do so, or not.

And on what evidence? Lisa Jardine, an historian, says that decision not to reappoint her (at age 69) to run the Human Fertilisation and Embryology Authority was obviously due to her Labour membership. Sally Morgan says the same. In fact, the figures indicate that this government has been biased — still inserting Labour placemen in every nook and cranny of public life. In 2011-12, 77 per cent of those appointed to public bodies who declared a political affiliation were Labour supporters, a higher ratio than Gordon Brown ever dared.

In fact, quangos and other public bodies have been relentlessly packed with Labour supporters ever since 1997. Year after year, the proportion of its activists appointed has been three or even four times higher than the proportion of Conservatives. With the Labour activist presence growing year on year like compound interest, the cumulative effect of all this has been a government in exile markedly skewed to the left — in terms of institutional culture and assumptions.

Just over four years ago, I warned in The Spectator that Labour was preparing a stay-behind fifth column well placed to disrupt the policy of an incoming government. Back then there were nearly 1,200 quangos with boards that resembled a Who’s Who of the Blair/Brown era. They threatened to form a state within a state led by a self-replicating elite. If these political entryists were ever to act in concert, they could cause the government real trouble and embarrassment. Look how effectively Baroness Morgan has been at getting her attack taken up by the media in recent days. Now imagine all that multiplied a thousand times over in the NHS, in social care, and in the environmental sector.

Before the 2010 election, David Cameron promised to cull the quangos. In opposition, he instructed his shadow cabinet to examine all the public bodies in their portfolios and submit them to a rigorous test to see if each was necessary. On coming into government, Francis Maude appeared to relish the task of cutting them back and there was talk of culls and bonfires. But the scale and pace of reform has been disappointing. The government insists it will be saving huge sums in the medium and longer terms — £2.6 billion was the first estimate. But the National Audit Office found, two years on, that little by way of saving had been achieved yet. Although some 262 quangos had been slated for abolition, only 56 had gone.

In some cases, abolition was in any case illusory: their spending and powers were simply transferred rather than done away with. Even the most optimistic forecasts still see five out of six quango staff keeping their jobs by the time of the next general election, and the sector now spends £80 billion of public money — more than ever. Many of the quangos being abolished have been tiny, barely active bodies with little or no budget to speak of.

Meanwhile, expensive lumbering giants such as the Environment Agency, headed-up by former Labour cabinet minister Chris Smith, have survived the half-hearted cull and short-winded bonfire (although the outraged and long-suffering inhabitants of the Somerset levels may have something to say about that). At the time of writing, the NAO is promising to come out with a further report on the reform of government any day. It will be very surprising if that shows any massive cutback of the sector beyond the modest tinkering already announced.

The truth is David Cameron has missed his chance for a really radical cutback of the quango state, and there is sadly very little the Prime Minister can do to reform it incrementally. Even if he were now minded to restore some political balance to public life, the Prime Minister would find himself severely constrained. The law says that each and every appointment must be made on merit. That means that any initiative to establish a more equitable carve-up of jobs between various political interests would itself be unlawful. There can be no compensating in the present for the excessive generosity shown to Labour supporters in the past. They have their advantage and the nation is stuck with it.

Even appointing non-aligned individuals risks incurring a backlash from the entrenched Labour establishment and their friends in the media, as we have seen over the Sally Morgan affair. In that Today programme interview, Baroness Morgan gave two examples where ‘non-Conservatives’ had been replaced recently. One was the Arts Council, where Liz Forgan’s old job went to the TV producer Peter Bazalgette; the other was the Charities Commission, where the ‘Quango Queen’ herself, Dame Suzi Leather, was succeeded by the writer and journalist William Shawcross. Neither Bazalgette nor Shawcross has any track record of Tory activism and neither is listed as having made a declarable donation to the Conservative party. Yet none of the pundits, interviewers or commentators I’ve heard in the past few days has even questioned that they should be counted on the Conservative side of the tally, despite Shawcross having told his parliamentary confirmation hearing that the only party he had ever actually joined was the SDP.

Nor is it likely that the recruitment trend will change. Last year the think-tank Policy Exchange looked at the reasons underpinning Labour’s dominance in public appointments. Their researchers asked why the system kept picking Labour applicants. Did the process favour left-wing types who’d learned the obligatory public sector pieties? There is clearly a bit of that, but in the end what Policy Exchange found was that the main reason so many Labour supporters were getting cushy public sector posts was because more Labour supporters were applying for them. It’s a cultural thing. When a Tory politician finds him or herself out of office, the natural thing to do is to go and earn some money in the private sector. For the Labour politico, the default mode is to find some way to continue being sustained by the public teat. The whole public sector thus becomes a Benefits Street for resting Labour politicians and activists. The system is now unreformable. If David Cameron ever gets another chance to slash back the quango underbrush altogether, he shouldn’t hesitate.

The Tories’ hopes of winning that second chance are, of course, not helped by their past indulgence towards their political opponents. The Labour fifth column is dug in and ready for the ruckus in the lead-up to May 2015. Nor is it the only part of the opposition assault for which the government is picking up the tab. Many Labour activists who didn’t quickly find a billet in some quango or other migrated after the last general election to the so-called ‘Third Sector’ instead. The Institute for Economic Affairs has calculated that there are some 27,000 charities dependent on the state for more than three quarters of their income. Even some of the top-name charities receive more money from the government than from private donors.

One of Labour’s parting gifts to the sector was to loosen the rules governing political advocacy and campaigning by charities — so they could, for example, denounce government cuts. And so the government finds its welfare policies lambasted by the Joseph Rowntree Trust, Save the Children warns that public spending cuts threaten British youngsters and the NSPCC says that the most vulnerable children are ‘bearing the brunt’ of government policies. Is it just coincidence that Save the Children is now run by Justin Forsyth, Gordon Brown’s former strategy chief, or that the NSPCC has taken on Labour’s former general secretary, Peter Watt? Once again, David Cameron’s government is subsidising its critics.

For some time, the inaction of Conservatives has looked like timidity. Now, in their different ways, both Labour and the Liberal Democrats have brought matters to a head. The public normally wouldn’t much care who is the part-time chairman of Ofsted. The key person there is the chief inspector, Sir Michael Wilshaw, and who convenes its non-executive directors is a connoisseur’s point.

But now it really does matter whether David Cameron will support Michael Gove in giving the post to the education philanthropist Theodore Agnew, who happens to be a Conservative donor, if that is the choice the Education Secretary is minded to make — even if that means facing down Nick Clegg. And it wouldn’t be the best time for the Prime Minister to fail a virility test.