News that the Big Lottery Fund - a super quango encharged with distributing funds to the good causes - spends 12 per cent of its budget on administration, six times more than some well-known charities and has has an astonishing 1,103 administrative staff despite a falling income – comes as no surprise to those of us who have been arguing for lottery reform for some time.
These kinds of balooning costs are all too common in the public sector. That's because - quite unlike Camelot who runs the National Lottery - there is no competitive pressure to reduce costs and improve service for those quangos distributing the funds. If Camelot fails, it loses its license. When did a quango last get sacked for being cost-ineffective?
Public bodies will always come a poor second to Companies or even Charities in the cost-effective and quality provision of public services. They just don't feel under any commercial threat.
Meanwhile, whilst National Lottery funding declines due to inefficient administration, a Labour government hijacking the funds for ordinary areas of public expenditure and the haemorrhaging of money to the London Olympics, the front page of the Times today leads on the Olympic Delivery Authority. This is another quango which has made the otiose calculation that land prices in Stratford would rise by 16% per annum over the next 15-20 years. Anyone in touch with the real world knows that projecting returns that high, that far into the future is ludicrous. They've only now just realised that even 6% could be too optimistic. Consequently this has created a £1 billion black hole in Olympic Funding. Again, will anyone take responsibility?
Of course not !
There is no contract here to be lost, just taxpayers money.
With a budget deficit of 3.2% GDP, an early goal for the next administration at a time of economic slowdown has to be to reduce the cost of government services. Cutting government expenditure and providing tax cuts is fine by me - I am a supply-sider. But I also accept, understand and realise that it is important that doing both of these will be a far easier argument to make to the wider public when they are combined with public sector reform that delivers the tangible benefits of lower cost and better government.
Policymakers need to start looking hard at increasing the competitive outsourcing of government services, especially at the local level. Added to that could be a privatisation programme of the government's remaining assets (The BBC, Channel 4, The Met Office etc.) and the creation of 5 year term limits for all the remaining quangos.
Unlike certain parts of the Public Sector, no one - not even on the left - ever really defends the quangos.
They are the low-hanging fruit of the oversize state.