New CIPD paper judges quangos fairly, potentially saving taxpayers millions

  2nd August 2010      
 CIPD, Company News

The CIPD have released a new policy paper to help the Government streamline the complex system of quangos (non-governmental organisations that perform governmental functions) operating in the field of education and skills policy. The findings of this paper could potentially save the public over £500 million.

This has been released in response to ongoing political debates on the size, scope and efficiency of quangos. The CIPD has felt that it is important to reassess and look again at why they exist and whether they should continue to exist, due to the cutbacks of government spending.

The policy paper, titled Quangos in the Education and Skills System, applies the following newly-devised questions, testing six significant education and skills quangos:

  1. Is it appropriate for the quango to receive taxpayers’ money for the role it performs?
  2. Does the quango offer value for money in terms of what it has achieved?
  3. Is the quango ‘crowding out’ or competing with the private or third sector?
  4. For those quangos with few or no competitors, is the private or third sector able and willing to provide the same service or function?

Using these four tests, the paper urges a thorough review of quangos, aiming to therefore provide better value for money for the taxpayer. The tests also determine whether each quango is making a positive, sustainable and tangible impact.

CIPD Policy Adviser on Skills, Tom Richmond, predicts that over £500 million of public money could be saved in two years, if the government dissolves or sells those quangos the CIPD policy paper reveals as not having a positive effect.

He says: “Our new analysis highlights a number of worrying trends. For example, several quangos now offer free consultancy, free event management and free teaching materials for schools and colleges — all courtesy of the taxpayer.” Additionally, some quangos have been buying out their private sector competitors, and others “are lobbying the government using government funds.”

Richmond continues that the role and purpose of each quango must urgently be individually reviewed due to there being large amounts of money at stake, and because of the forthcoming government spending cuts.

Objectivity in such decisions is vital, “given that unless spending decisions are made in an open, transparent and consistent way, cutting spending on quangos could lead to a number of unintended yet potentially serious consequences.” Tom Richmond states that this could include “job losses, union relations and even damage to our economy.”

Many existing quangos do perform fundamental functions and are good value-for money. They are, though, bound to face scrutiny with a current strong political emphasis on protecting frontline services. The CIPD feel that the four tests in their new policy paper provide a “fair and appropriate method for judging education and skills quangos”

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