Ben Farrugia: Britain's unseen £64 billion state

Ben Farrugia is a Policy Analyst at the TaxPayers’ Alliance.  In this Platform piece he examines the dizzying scale and £64bn cost of Britain's 1,162 quangoes.

Five years ago, the Public Administration Select Committee strongly recommended that the Government compile and publish a list of all the quangos, agencies and other unelected bodies that exist in the UK. Given that the Government has chosen to ignore that recommendation, we at the TaxPayers’ Alliance have produced that list (PDF) for them, to allow the public to truly appreciate the sheer size and scope of Government in Britain.

People have of course been aware for some years that quangos have been on the rise, with ever larger portions of taxpayers’ money and public policy being passed out of democratic control and into the hands of a myriad of bodies. But most will still be shocked by the true extent of Britain’s unseen government. Like an iceberg, whose vast mass lies hidden beneath the water line, the familiar quangos represent only a small part a whole unknown layer of government.

The full picture is staggering. Alongside the departments directly controlled by Westminster and the devolved assemblies, and those duties overseen by local government, there exists a convoluted hierarchy of agencies and quangos, hundreds of bodies existing to implement specific aspects of government policy. The TPA’s research has uncovered no fewer than 1,162 of these bodies, in receipt of over £64 billion of taxpayers’ money and employing almost 700,000 people. This is the most comprehensive survey of the quango industry ever compiled, but there are no doubt other bodies yet to be identified.

The scale of government, the complexity of its structure and the dizzying spectrum of responsibilities and activities it has gathered to itself are a serious problem. Distinguishing clear divisions of responsibility and defined lines of accountability is not only difficult, it is impossible. Not only are those taxpayers funding the system finding themselves frozen out of  it, voters’ concerns are easily ignored by vast bureaucracy they cannot hold to account. Many in the public sector concede their work is bogged down, obstructed and even counteracted by the chaotic mass of different bodies.

This report raises a number of important issues. For a start, do we need over a thousand government sponsored quangos? The diversity of organizations represents the extent to which the State has extended its responsibilities and powers into almost every area of individual, civic, public, private corporate, scientific and cultural life. The massive range of responsibilities the State has accrued places an unsustainable burden on government as an organization.

Take, for example, the Department of Trade and Industry, now rebranded as the Department for Business, Enterprise and Regulatory Reform (BERR). In 2006-07, the DTI had a Budget of £23 billion, 244,000 staff and oversight of 68 subsidiary bodies. Those bodies had responsibility for everything from architectural design to chemical weapons. What Minister could possibly have the experience or skills to manage such a bizarre and unwieldy mass of activities?

And that is only one department. Government as a whole has become too large, controlling over 45% of GDP and employing nearly 20% of the total workforce. It is unwieldy, plagued by inefficiency and waste, and increasingly failing to deliver satisfactory public service.

The continuous increase in the use and cost of quangos is symptomatic of this wider problem in government. No-one, particularly politicians with little prior experience of management, could possibly manage the activities of the dozens of subsidiary bodies over which Ministers are notionally responsible. The range of issues, people and responsibilities is simply too much for anyone to control.

The result of this boom in public agencies, and the rise in areas controlled by the State, is that the web of Government becomes ever more tangled. Our public services are performing much more poorly than we have the right to expect, with educational and health standards falling behind those of our peer countries. Government today over-reaches itself, doing too many things badly, rather than a few things well.  Our concerns over the extent and cost of quangos should lead us into discussions about what we feel government should do at all, about where the responsibilities of government end and those of society begin. The specific problems we face in terms of education, health, prisons and so forth, are rooted in problems with the way government has come to be structured. If we wish to see real change, look to see substantial improvement in public services, we must consider structural reform as much as changes in policy.

Fundamental reforms are needed in British Government - both in terms of encouraging politicians to focus on high level policy rather than micromanagement, and in terms of shifting responsibilities out of State monopolies and into civil society. Before we can even begin to reform the structure of government, though, we need to understand the details and implications of its structure - the TaxPayers’ Alliance’s research series on the Structure of Government will do that, and this comprehensive guide to Britain’s unseen state is the first, crucial step.