In the game of quangos players take turns to choose non-government bodies to close, merge or privatise. But watch out! If you get it wrong you might not get elected again. This is how Francis Maude dealt with the ones dealing with construction
After all the build up, one of the biggest surprises in Francis Maude’s quango cull last week was how little it decided. Of the 901 under scrutiny, 192 were axed and 118 merged, but many more were left in suspense. This is a shame for the worried civil servants who caused the Cabinet Office website to crash: they will have to worry a bit longer.
And it’s not just them. Quangos are an important client group for the construction industry: for example, £10.5bn of work has come from the Homes and Communities Agency and Partnerships for Schools since 2008.
As only some quangos require primary legislation to abolish, Maude prioritised those that do. That means bodies such as Cabe and CITB-Construction Skills will have longer to wait before learning their fate. So what do we know, and what are the options?
Annual funding : £5.5bn in 2009/10
Staff : 981
Situation The HCA has had its responsibilities switched around. It has lost control of London to the Greater London Authority and has acquired the job of making sure housing associations do not go bust and tenants get a certain quality of service, which had been the jobs of the defunct Tenant Services Authority. For now, it will continue to carry out its principal functions of giving out grants for social housebuilding and providing land for regeneration.
A communities department spokesperson has said the functions of the agency in the future will depend on the department’s settlement. The most likely outcome seems to be a reduction in its activity by about half, with funding to the body itself cut to a minimum. The HCA is likely to have three main areas of responsibility: new housing supply, placemaking and regeneration, and the existing housing stock. But it is unlikely to seek to buy new land or promote its own developments; it is more likely that it will offer advice to councils to get their regeneration schemes off the ground.
As expected, England’s three development corporations will be scrapped. The Olympic Park Legacy Company, which is charged with the regeneration of the area of east London where the Games will be held, is to become a mayoral development corporation reporting to Boris Johnson. Sources suggest it is likely to be granted development control and plan-making powers.
Funding : It pays itself out of the training levy. Last year, that was £186m; it also receives £20.4m in government grant, and makes £110m from commercial activities
Staff : 1,415
Situation : A decision will be taken on whether to privatise the CITB next month, after consultation with the industry. If it is privatised, firms will not be legally obliged to pay the training levy, as private bodies cannot collect tax. A statement from the body last week played down such fears. Mark Farrar, its chief executive, said: “We welcome the government’s announcement that it recognises the value of levies as a way of harnessing employer investment in skills and training.”
1 Privatise. This is unlikely. A source close to the CITB said: “Whether it’s private or public, there’s no way you could run it on a voluntary basis. Can you imagine the chaos?”
2 Part-privatise. This could lead to a private entity running the training body, with a mandatory levy collected by an arm of government. Stephen Ratcliffe, chief executive of the UKCG, suggests this halfway house is likely. “What is part of the conversation is where the balance between the two could be struck,” he said. This would remove a loss-making body from the government’s balance sheet, and may not be unwelcome to the industry. Many, including the Federation of Plastering and Drywall Contractors, have attacked the CITB, pointing out that last year it used its £186m levy to pay out only £169.4m in grants.
Partnerships for Schools
Annual funding £5.2bn received from education department in year to 31 March 2010
Situation The remit for Partnerships for Schools (PfS), the delivery agency for school building projects, will be decided by the James review of capital spending in education. This is due to send interim findings to ministers this month, but it is not thought it has reached a final position on the future of PfS. It will finish its work at the end of the year.
1 Scrap PfS and have all procurement carried out by the Department of Education. It is thought that the James panel is against this idea. The fact that PfS has been asked to advise on the free school programme suggests that the government appreciates the need for a separate delivery body.
2 Refocus its work on procurement, dropping educational outcomes. This is by far the most likely solution. Whether it will still be called PfS is another matter, but expect to see some of the same faces involved. Many expect that the government will want to retain the expertise that has been built up within the quango, even if it dislikes the bureaucracy associated with it.
Funding : £11.6m public funding, including £6.9m from communities department and £4.7m from DCMS. It makes £3m in earned income
Situation Cabe did learn one thing from the announcement: it is not to be merged with English Heritage. If it were, it would have been included in the public bodies bill. But that was about it. Unlike the CITB, it was not even told when it can expect to find out.
Currently Cabe has three principal activities: the design review of major projects, the advice it gives to local authorities and research, which includes publishing guides and disseminating best practice.
1 Trim. This is seen as the most likely, but it’s not clear how it would done. Communities department funding could be withdrawn, which could greatly reduce the commission’s activities and force it to charge for some services.
2 Privatise. In theory, Cabe could charge local authorities for its advice, and charge developers for its design reviews - with obvious consequences for its perceived independence.
3 Merge with the HCA. Housing and mixed-use development forms a large part of Cabe’s work, but neither body would be keen on a marriage, in part because of potential conflicts of interest, and in part because the HCA has no role beyond housing.
4 Scrap it. Not impossible (Cabe has enemies in the industry) but most commentators feel it carries out a necessary function.
British Nuclear Fuels
British Waterways (which becomes a charity)
The Commission for Rural Communities
The Commission for Integrated Transport
Design Council (becomes a charity)
The Infrastructure Planning Commission
National Housing and Planning Advice Unit
National Tenant Voice
Architects Registration Board
Building Regulations Advisory Committee
Nuclear Decommissioning Authority
Olympic Delivery Authority
Engineering Construction Industry Training Board
The Sustainable Development Commission