Bonfire of the quangos? Keir Starmer pledges shake-up of regulators

Sir Keir Starmer has pledged to slash the costs of regulation with an “active government”.

In a speech, he said politicians had chosen to hide behind quangos and he took aim at a “cottage industry of checkers and blockers slowing down delivery for working people”.

But the key announcement was the abolition of the “world’s largest quango”, NHS England, which works with the government to agree funding and priorities, and oversees the delivery of services.

He announced the government was bringing it back under the control of the Department of Health.

Incoming governments have often sought to cut the number of quangos – but what are they and what do they do?

Quango stands for Quasi-Autonomous Non-Governmental Organisation, but the government calls them “arm’s length bodies”. They are organisations such as regulators, cultural institutions and advisory bodies, which are funded by taxpayers but not directly controlled from Whitehall.

They range from huge organisations like NHS England, to smaller ones like the Gambling Commission and the British Film Institute.

The number of quangos has fallen by more than half since 2010 but there are still more than 300 across the UK.

Under the Conservative-Liberal Democrat coalition, nearly 300 were axed – dubbed the “bonfire of the quangos” – in an attempt to improve accountability and cut costs.

Despite Sir Keir indicating he would also like to reduce the role of quangos, the new Labour government has set up more than 20 since winning power.

These include Great British Energy, which will invest in renewable energy to help meet the government’s clean power goals, and Skills England, which aims to support people in finding jobs.

Asked earlier this week if the government was planning another “bonfire of the quangos”, Downing Street said the PM wanted to see a more “active and agile state”, rather than “outsourcing” decisions to other bodies.

Almost 60% of day-to-day government spending is channelled through quangos, with 90% of this going to the largest 10 bodies.

The total budget for quangos in 2022/23 – the latest published figures – was £353.3bn.

Campaign groups like the TaxPayers’ Alliance have long criticised quangos, claiming they allow ministers to dodge responsibility for mistakes and can be inefficient and costly.

The Institute for Government think tank says in some cases scrapping public bodies can save money and improve how services are delivered.

It gives the example of how absorbing JobCentre Plus into the Department for Work and Pensions helped cut the department’s workforce and office space by a third.

But the think tank argues abolitions also cost money and time in the short term, with services disrupted when powers are transferred.

Moving activities into departments, while improving accountability, can also dilute expert knowledge.