The way of all quangos

Stack up on firewood and start stuffing your guy – we’re going to have a bonfire. While tradition dictates that this should take place on 5 November, it is just as customary that in the run-up to a general election our politicians start to gather extra firewood – for a bonfire of the quangos.

And so it was that last month, Treasury minister Liam Byrne demanded that all departments conduct an urgent review of all “quasi-autonomous non-governmental organisations”. Opposition leader David Cameron echoed his sentiments a few days later, following in the footsteps of Margaret Thatcher in 1978, and just about every vote-seeking politician since.

But, with a Conservative government seeming increasingly likely, how serious is Cameron’s quango-cutting pledge, and what would this mean for the construction industry, blessed as it is with many a quango? We’ve asked how likely some of the most important ones are to survive the pyrotechnics, at least in their current form, and how much they would be missed.

790 and counting …

While everyone seems to be in agreement that there are too many quangos, the definition of the term is vague, and therefore the actual numbers are uncertain. The Cabinet Office reckoned there were 790 in Britain as of March 2008, spending £34.5bn of government money a year. The right-wing think tank the Taxpayers’ Alliance has counted 1,162, employing more than 700,000 people. It puts the cost at £63.5bn. But Ben Farrugia of the Taxpayers’ Alliance says he hasn’t counted the many local development organisations whose funding comes largely from the government or from other quangos. “There can be up to six or seven links in a chain,” he says. “Money goes from one organisation to another, all for very good reasons, but every link of the chain costs money.”

Particularly fecund are big-ticket schemes such as the Olympics or the Thames Gateway, which spawn a multitude of well-meaning Partnerships, Visions, Futures and Renaissances, all requiring offices, steadily rising staff numbers and well-remunerated directors.

Whether an incoming government would really do anything to cut the numbers is questionable – they never have before. The overall number of quangos has dropped since 1998, but the costs and staff numbers have risen as consolidation has given rise to super-quangos like Ofcom and the Homes and Communities Agency. Neither did the Tories do any better last time they were in power, and Cameron has already announced a number of new bodies that he would set up, such as an independent board to run the NHS and an “Office of Tax Simplification”. And Conservative London mayor Boris Johnson has presided over the establishment of one of the woollier-sounding organisations in quite some time, the Olympic Park Legacy Company. But there will undoubtedly less money to spend and hence fewer bodies needed to spend it.

So which are most at threat? The current pariah is the Learning and Skills Council (LSC), for its expensive mismanagement of college building, but it’s already on the fire – from next April it will be replaced with two new bodies: the Skills Funding Agency and the Young People’s Learning Agency.

But before we consider who might join the LSC, a word of warning to anyone getting too carried away with bonfire fervour: the political outrage over quangos has been interpreted by cynics as an excellent way for the government to temporarily stop spending at a time when the coffers are running low – a worrying prospect for an industry dependent on schools, hospitals and social housing work.

WRAP

Funding: £70m in 2007/08 from Defra, the Scottish Government, the Welsh Assembly and the Northern Ireland Executive.
Staff: 230

The government’s Waste and Resources Action Programme has been going since 2000 and covers the retail, agriculture and recycling industries as well as construction. Wrap’s admittedly unglamorous work with waste and recycling has yielded tangible results – it claims its programmes have saved the equivalent of 12 million tonnes of carbon dioxide reaching the atmosphere. Its Halving Waste to Landfill initiative was launched last year and more than 100 firms signed up in the first six months.

Thumbs up Everyone seems to agree that WRAP is a good thing and does good work. “We need more quangos like WRAP,” says George Martin, Willmott Dixon’s head of sustainability. “WRAP has taken construction away from thinking of waste as something we get shot of to a resource, which is incredible.”

Thumbs down But there do seem to be an awful lot of bodies with similar responsibilities – the Carbon Trust, the Energy Savings Trust and Envirowise for example. “It could definitely do with being cleaned up,” says Bob Rendell, managing director of contractor Leadbitter. “There’s huge confusion around this government’s green energy programme in terms of how all the different quangos and advisory groups interact with each other and the public.”

Chances of survival intact It seems unlikely that the sheer number of well-meaning green quangos can survive any serious review. WRAP has already outlasted its peers – in March Defra announced that it would absorb six other bodies to become the only one devoted to resource efficiency, but it is still carrying out work that the Tories would probably argue is better done by the private sector. It also lags behind bodies like the Carbon Trust in widespread awareness of its work, which makes it an easier target.

What does WRAP say? “WRAP believes it is absolutely right that there is close scrutiny of how taxpayers’ money is spent,” says a spokesperson. “Our top priority is to deliver what we are asked to, and to do that very well, making sure we deliver good value to taxpayers. We think we’ve done a very good job.”

Flammability rating: 4/5 (a fireworks factory)

Partnerships for Schools

Funding: £12m in 2007/08, from the Department for Children Schools and Families and another quango, Partnerships UK.
Staff: 111

Set up in 2004 to preside over the enormous and fiendishly complex secondary school building programme, it’s fair to say Partnerships for Schools (PfS) didn’t have the most glowing reports in its early years, missing successive targets and enraging contractors and architects with an epic 10-stage procurement process and bid costs running into millions.

Nowadays, however, it’s a model pupil and, under the leadership of Tim Byles, it is catching up with those targets. It has also been rewarded with responsibility for the academies framework in 2006, £15bn worth of capital projects from the Department for Children, Schools and Families (DCSF), and now may take over delayed college projects from the Learning and Skills Council.

Thumbs up It wasn’t so much the quango as the process it was saddled with that was the problem, and PfS is popular because contractors feel it has responded to the industry’s concerns – by opening the academies framework up to large regional contractors, for example.

“Overall it’s achieved a lot,” says Peter Owen, Midlands managing director and education sector leader at Willmott Dixon, which does 70% of its work in the sector. “It has standardised some of the contracts and got the procurement process down to 52 weeks from about 75, and I think it would like to get it down further. The good thing about PfS is that it listens.”

Thumbs down “It’s possibly seen as the least bad quango in education, but that doesn’t say much for them,” says former RIBA president Jack Pringle, an outspoken critic of the BSF process during his tenure.

Chances of survival intact The Tories have backed the rather damning verdict of two right-wing think tanks, the Centre for Policy Studies and Policy Exchange. A Policy Exchange report on PfS in July said it should have its remit radically curtailed. “A key part of its job is to deliver ‘educational transformation’ rather than just good buildings. As no-one in the sector or the quango itself can define what this means, this part of its mission should be axed,” says Anna Fazackerley, head of Policy Exchange’s Education Unit.

Spending cuts will also mean a much smaller role for PfS. What funding will be available is likely to be given directly to schools to spend, without interference by either quangos or local authorities.

Money goes from one organisation to another, all for very good reasons, but every link of the chain costs money

Ben Farrugia, Taxpayers’ alliance

What does PfS say? “Over the past few years there have been more than a dozen reports and inquiries into BSF, with the consensus that BSF is now being well managed; that PfS is keeping costs under control; and that the BSF schools are delivered to a higher standard than ever before.”

Flammability rating: 3/5 (a cosy log fire)

Health and Safety Executive

Funding: £210m in 2008/09 from the Department for Work and Pensions.
Staff: 3,582

The Health and Safety Executive (HSE) in its current form has only existed since April 2008, when it was formed from a merger with the Health and Safety Commission, which had overall responsibility for occupational health and safety regulations in Britain. The HSE is now the single regulatory body for health and safety at work, inspecting sites, enforcing the CDM regulations and producing steadily improving figures on the number of site injuries and deaths.

Thumbs up “We have a good relationship with the HSE,” says Stephen Ratcliffe, chief executive of the UK Contractors Group. “It’s working very well to steer the industry. In terms of resources, it is quite stretched and its biggest problem is getting consistency across the country. Everyone focuses on deaths, which are much better this year, but overall, incident figures are coming down on a pretty regular basis. I think they should be kept in their current form, if not given a little bit more resources.”

Thumbs down The HSE can never have an inspector on every site, so it’s almost impossible for it to play a policing role. Meanwhile, Construction (Design and Management)] Regulations, which have given clients and designers responsibility for safety since April 2007, are not deemed a success. “For a long period, the question has been what the impact of CDM has been compared to its cost,” says Rob Smith, senior partner at Davis Langdon.

“Building sites are still too dangerous compared with the rest of Europe. The focus should be on the work on site rather than design,” says Jack Pringle.

Chances of survival intact It would be a brave politician who tried to dismantle the HSE, not only for the vital role it plays in improving safety standards, but because of its legislative responsibility for enforcing UK and EU law. But the Tories are not fans of excessive “nanny state-ism”, so we can expect to see a refocusing on individual responsibility for health and safety and perhaps a slimmed down role for the HSE.

What does the HSE say? In a letter to the Daily Mail in July, chief executive Geoffrey Podger said: “HSE is always looking to improve its effectiveness and reduce costs. For example, we recently moved our HQ from London to Liverpool as part of a programme that will save the taxpayer around £57m over the next 10 years.”

Flammability rating: 2/5 (any bonfire you try to light in November)

Cabe

Funding: £12m from the Department for Culture Media and Sport, and the Department for Communities and Local Government, plus an extra £2m from a long list of other bodies, including quangos like the Olympic Delivery Authority, Arts Council and English Nature.
Staff: 120

Construction’s most divisive body, Cabe is loved by architects and the design-minded and loathed by pretty much everyone else. “Oh God, Cabe,” is a frequent reaction from contractors and developers, exasperated by what they see as unrealistic aspirations and unhelpful late-stage interference. But this could also be seen as a mark of Cabe’s strength and its successive leaders’ triumph in turning a minnow of a quango into a big hitter in the corridors of government and expanding its remit, culminating in a government announcement of minimum design standards for all publicly funded buildings in May.

Thumbs up “We do need a design champion at government level,” says Jack Pringle. “But I think it needs to get tough again like it was when it first started. It needs to be prepared to say unpopular things. Its job is to champion design, and it needs to absolutely focus on that.”

Thumbs down Stephen Ratcliffe says: “We’ve been frustrated that Cabe has intervened at a late stage, added to bid costs, on PFI hospitals for example. It’s a bit subjective and not always consistent.”

Chances of survival intact The cause of good design is close to the Conservatives’ heart and likely to remain so, but insiders express doubts as to whether Cabe has been successful at promoting it, particularly since the departure of Sir Stuart Lipton as chair in 2004. Its increasing expenditure and staffing costs have drawn criticism from shadow culture minister Ed Vaizey and both he and housing shadow Grant Shapps have questioned the overlaps between Cabe and the Homes and Communities Agency, which has a statutory duty to promote good design. There could be fundamental changes in store.

What does Cabe say? “We’re used to being scrutinised and are already accountable to parliament for every penny we spend. The need for an independent adviser isn’t going to go away: 81% of the people that come to design review find it useful and 70% revise their schemes afterwards. But we’re only part of the way to equipping local decision makers with the skills and confidence to choose good design.”

Flammability rating: 3/5

Homes and communities agency

Funding: £3.9bn in 2008/09 from the communities department.
Staff: 866

The Homes and Communities Agency’s website proudly states that it’s the “biggest regeneration and development agency in Europe” – which will certainly place it under the scrutiny of an incoming Tory administration. The HCA spends the government’s money on housing, but also fulfills more nebulous policy roles on such issues as rural housing, housing vulnerable people, equality and design.

Thumbs up So far, so good. “We’re happy with the HCA already, it’s a good change from the previous organisations as it’s purely focused on delivery and getting houses built, not policy,” says Steve Turner, a spokesperson for the Home Builders Federation. “It’s facilitated the Kickstart housing delivery programme, and HomeBuy Direct. We don’t want a long root-and-brand review if it’s going to have an impact on housing delivery.”

Thumbs down It’s too early to know how effective the HCA’s initial efforts have been.

Chances of survival intact Altough the Tories were against the HCA’s formation, chair Robert Napier is much admired. They have said they will be looking closely at whether the HCA is the most effective way of delivering homes, although in the teeth of a housing shortage it would be politically dangerous to axe it altogether. But there will be a lot less money to spend, so fewer people required to spend it.

What does the HCA say? “We are happy to be accountable for what we deliver both nationally and locally and judged on that performance.”

Flammability rating: 2/5