Quasi-autonomous non-Governmental Organisations (QUANGOS) have been part of the UK public sector for many decades and there are often robust political and managerial debates about the usefulness (or otherwise) of these public bodies. This has been brought into focus recently by the atrocious state of Government finances in the UK and the need for the next Government (whoever it may be) to make real terms reductions of public expenditure in excess of £100 billion.

Not surprisingly when there are threats to front line pubic services such as schools and hospitals many will question whether we really need the large range of QUANGOS which currently exist and also whether we can afford them in the current economic and fiscal climate.

A well-researched document recently produced by the Taxpayers Alliance claimed that in the UK there were a total of 1162 QUANGOS and other agencies which cost the taxpayer a total of £63.5 billion. These figures seem to chime with similar figures used by David Cameron in a recent speech but differ markedly from other claims which put total QUANGO expenditure at £14 billion.

This brings us to the first issue of what do we really mean by a QUANGO. For example, the figure of £124 billion includes in its list of QUANGOS all of the NHS Trusts in the UK which deliver hospital and community services. Few would regard NHS Trusts as being QUANGOS in the usual meaning of the world. Even the TPA report includes in its list of QUANGOS the following organisations:-

• The British Museum
• The BBC
• Kew Gardens
• The National Library for Wales

I am not sure many people would regard since high profile and well known organisations as QUANGOS.

Perhaps QUANGOS can be considered in four main groups:-

• Service providers – some QUANGOS such as the British Museum provide services directly to the general public.
• Funders – some QUANGOS distribute public funds to relevant external organisations. Thus the Arts Councils distribute funds to arts projects and the Higher education Funding Council for England (HEFCE) distributes funds to universities for teaching and research. So it is misleading (as the TPA report does) to claim that HEFCE spends £7billion per annum. The vast bulk of that money, with the exception of £20million for internal administrative costs, is distributed to universities for teaching and research. Also in this category might be included Regional Development Agencies.
• Regulators and Inspectors – some QUANGOS are charged with inspecting and regulating public sector service providers. Thus OFSTED inspects schools and the Healthcare commission inspects hospitals. The Audit Commission audits and inspects a range of public bodies. Also in this category might be included QUANGOS such as the Equalities commission.
• Advisors – there are a myriad of bodies of varying size which provide advisory services to various parts of Government.

There are many questions which will continue to be asked about QUANGOS. These include:-

• What benefit do they actually produce? For example, have schools really improved as a result of OFSTED? Have inequalities really reduced as a consequence of the Equalities Commission? The evidence is often thin. Also the activities of such inspection QUANGOS often place great burdens on the public bodies being inspected.
• Could their work be done by other existing organisations? For example, many of the roles of the Learning and Skills Council (LSC) in funding post-16 education used to be done by local authorities. Also, much economic work is done by local authorities as well as RDAs. Do we therefore need these QUANGOS when local authorities might do the same work for less?
• What public accountability is there for the work of QUANGOS? The Boards of QUANGOS are not elected but appointed by Ministers who seem to closely control what they do in some detail.
• Why are so many QUANGOS based in London when their wok could be just as easily done in other parts of the UK?
• Are there too many QUANGOS? For example do we need a QUANGO to fund higher education (HEFCE) and a QUANGO to fund post 16 education (LSC)?
• Are QUANGOS just devices for Ministers to reduce civil service head count and to avoid direct responsibility?

Overall, the future of QUANGOS probably depends on how much time and energy Ministers can devote to the issue given the vast problems which will face the next Government. Some savings can probably be squeezed out of the QUANGO system but it is probably much less than currently imagined.

Find out more

Malcolm appeared on BBC One's The Politics Show talking about QUANGOs on November 8th

Get under the skin of questions of private and public finance with The Open University Business School

The drastic cuts in public services that are now touted as necessary to meet the cost of the folly of the banks, and the “light touch” of regulators and government, contain some familiar and unfamiliar features for those of us with long memories of public sector reform: outsourcing and reengineering on the one hand, and a cut in spending on, and better value for money from, IT on the other.

“the greater the overall power of the IT industry in a country, the lower the performance of government IT systems.”

The claim that “a 20% saving on the estimated £16 billion spend (equivalent to £3.2billion) [on IT] appears to be achievable.” appears in a document published recently by the Treasury - Operational Efficiency Programme: back office operations and IT.

This report also estimates that back office operations across government and the public sector cost £18 billion, on which savings of 20 to 25 per cent – “a reduction of around £4 billion” - are achievable. One of the primary ways in which this will be achieved is through business process reengineering (BPR), and surprise, surprise, outsourcing. Neither is a new feature of the public sector, of course. BPR was a staple of the reforms of the 1990s, as it was in the private sector. And in both sectors many BPR initiatives failed to deliver the promised benefits. Outsourcing has an even longer pedigree. Indeed, as I’ve discussed here previously, the UK government and its advisors have been particularly zealous advocates of this approach to organisational change.

While the Operational Efficiency report’s authors have obviously taken a rigorous approach to collecting and analysing the data on which their conclusions and recommendations are based, a number of unrecognised contradictions and omissions did catch my eye.

First, the report notes that “Devolution and fragmentation across the public sector mean that there is a wide variation and substantial complexity in back office operations.” (p.38).

Houses of Parliament.
[Image © copyright Photos.com]

Unfortunately it then fails to acknowledge that much of this is due to the extent to which functions have been outsourced, and the lack of serious consideration that is too often given to the wider - or “hidden” –-costs and implications of this.

Second, the report goes to some lengths to explain why it is difficult to estimate the amount spent on IT and why international comparisons are “very difficult”. Nevertheless, based on an analysis of data from a number of sources it concludes that “the UK public sector’s IT spend is much more than other similar countries and that the UK does not get a proportionate return from this much higher spend.” (p.60).

Given that the report also notes that “£13.2 billion of public sector IT expenditure [of the estimated £16 billion] was committed to external contracts in 2007-08” (p.55), this isn’t exactly a ringing endorsement of the value of outsourcing, either. Furthermore – and despite many references to the lessons that can be learned from the private sector – there is no mention that I can see of the now established trend (particularly amongst large private sector companies) to insource IT requirements.

The most significant omission that struck me was, however, the report’s ignorance of a piece of research that is of direct relevance, particularly to the finding above: Digital Era Governance: IT corporations, the state and e-government. Published in late 2006, and based on research spanning five years funded by the UK’s Economic and Social Research Council, this book details and discusses findings from an international comparative study of, amongst other things, the performance of government IT. Amongst its many findings is this: “the greater the overall power of the IT industry in a country, the lower the performance of government IT systems.” (p.6).

Fingers on keyboard.
[image by Mike Traboe, some rights reserved]

It’s no secret that in the UK by the early 2000s five IT services and supply companies held 90 per cent of the government market: a situation that is unlikely to have changed, given the figure for external contracts I note above. So, rather than pursue the tired logic and questionable returns from outsourcing and reengineering, why not address an underlying problem. Put in place effective mechanisms to address this dominance and dependency. Unfortunately, without a shock to the system of the magnitude of the MP’s expenses scandal - which wasted spending on IT dwarfs, of course - I suspect that may never happen.

About the author

Ivan Horrocks is a lecturer and member of the Technology Management Group at The Open University. He has written many publications about the relationship between information and communication technologies (ICTs) and government and politics.

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It often starts with an event or a phenomenon. It could be a mass killing, a spreading flu, increasing migrants, or decreasing credit. Before we understand its causes, its consequences are predicted with ferocious repetition. "We are facing an unprecedented enemy that is well organized". "It could cost billions to contain the pandemic". "Are we prepared to provide services demanded by migrants?" "With the collapsed economy we may be facing a depression not seen since 1929."

"It seems governments, businesses, nongovernmental and news organisations all have some vested interest in these disproportionate responses."

These predicted consequences become progressively disproportionate to actual consequences. The collective response becomes equally disproportionate. Armies invade countries with dodgy dossiers that look credible to some. Mass mobilisations are enlisted to contain pandemics that are not. Massive investments are made in border control and tracking methods. Trillions and billions are printed and pumped into markets with fancy names such as "quantitative easing".

It seems governments, businesses, nongovernmental and news organisations all have some vested interest in these disproportionate responses. A few academics, journalists, scientists, and activists warn against disproportionate responses and call for better understanding of causes rather than focusing on predictions of consequences. "There is no justification for war." "More people are killed on the road than by terrorist attacks." "Migrants contribute to the economy and we need them." These voices are drowned out, mostly by the argument that, had there not been dramatic responses, situations would have been worse - claims that are impossible to verify. Do you remember The Millennium bug?

"…after every cycle we have gone through, we realise that the responses we were led to believe to have been appropriate proved to be well beyond what was necessary."

What follows is more prophecies, prognostications, predictions, and various scenarios. Having determined the dramatic consequences to follow, explanations that fit those consequences are offered. In other words, in a strange but social twist of logic, consequences are made to explain causes. For lack of a better term, I can’t help but call these cycles of neurosis. In the twentieth century psychoanalysts called the disproportionate response to perceived dangers neurosis - a term that is no longer used in psychology to define any disorder. But it persists outside established science and many sociologists have used the term to define collective phenomena of anxiety, hysteria or unease.

I think it is apt to use the term "neurosis" and to name our response "neurotic" because the cycle that starts with a bang almost always ends with a whimper. It seems that, after every cycle we have gone through, we realise that the responses we were led to believe to have been appropriate proved to be well beyond what was necessary. Is Al Qaeda really the threat that it was presented to be? Are migrants really the threat that they were represented to be? Is there really an economic collapse to the extent that has been suggested? In a short time it has already been demonstrated that the most recent cycle - swine flu - may have been an over-reaction. The headlines already declare that swine flu did not spread as fast as predicted. The BBC News reported tests showing that the swine flu virus in Mexico may be less virulent than first feared, and asked "Did Mexico over-react on swine flu?" It is as though it was only Mexico that over-reacted.

Ten years ago the New Yorker cartoonist, Roz Chast, introduced "the neuro" as "the first official worldwide currency" in one of her cartoons. It may have been prescient. We really need to understand why it has become so. What are the reasons for the collective neurosis of our times?

Find Out More 

Isin, E.F. (2004) The Neurotic Citizen, Citizenship Studies, 8 (3), 217-235.

Horney, K. (1937) The Neurotic Personality of Our Time, New York, W.W. Norton.

Fromm, E. (1944) Individual and Social Origins of Neurosis, American Sociological Review, 9 (4), 380-384.

Roz Chast, The Back Page, “Introducing the Neuro - The First Official Worldwide Currency,” The New Yorker, April 26, 1999, p. 196.

About the author

Engin F Isin is professor in politics and international studies and director of the Centre for Citizenship, Identities and Governance at the Open University.

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