By Haram Lee, University of Southern California
In Britain, quangos (quasi-autonomous non-governmental organisations) have been an integral part of the British government. The history of these special-purpose agencies working at an arm’s length distance from the ministers goes as far as the 17th century. Before the current Coalition Government came into power, Britain was in a state of ‘quango explosion’, as the previous Conservative governments (1979-1997) and especially the Labour governments (1997-2010) were keen on delegating specific policy authorities and tasks to the quangos.
Before the Public Bodies Reform, it could be argued that there were over 800 quangos in government, using a broader definition of what quangos are. These quangos are ubiquitous in all areas of public policy, to name a few, the Defence Nuclear Safety Committee in defence, the BritishMuseum in culture, and the Medical Education England in health.
To overturn this explosion of quangos, the Conservatives emphasised the need for a comprehensive review to “cut the unaccountable quango state and root out waste”. They argued that a quango should only exist if it answers yes to one of the three tests: 1) Does it perform a technical function?; 2) Do its activities require political impartiality?; and 3) Does it act independently to establish facts? Soon after forming a Coalition Government with the Liberal Democrats, the government published the Public Bodies Reform – Proposals for Change in October 2010, which was a comprehensive review of the quangos and gave each quango one of the five main decisions — retain, retain but substantially reform, merge, abolish, and still under consideration. Whilst around 50 percent of the quangos were to be retained as they were, around 40 percent of the quangos received the most extreme decision of being abolished. In the official statements made by Francis Maude, the focus of the Public Bodies Reform was on keeping the quangos accountable.
In a research project led by Professor Anthony Bertelli at the University of Southern California, I am currently working on creating a unique quango-level data set of the British quangos before and after the Public Bodies Reform. As the initial analysis of the Public Bodies Reform decisions using the data set, Professor Bertelli found that the level of ideological policy conflicts between the Labour Party and the Coalition Government could statistically predict the likelihood of receiving one of the reform decisions. The main finding was that the quangos in policy areas where there is greater ideological divergence were more likely to be abolished as opposed to receiving one of the decisions that require some reform but no complete abolishment. This is because delegating certain policy tasks to quasi-autonomous bodies is a way of making policy commitments, leaving a legacy, and tying the hands of the new government, which could ultimately result in greater likelihood of divergence between the policy preferences of the new government and the actual policy outcomes made by the quangos. Hence, the Coalition Government would be more willing to abolish the quangos in policy areas that could lead to greater policy divergence.
I have expanded Professor Bertelli’s analysis by including quango-specific variables to test if the individual characteristics of the quangos before the 2010 Public Bodies Reform could statistically predict the likelihood of receiving one of the reform decisions. In addition to supporting Professor Bertelli’s earlier finding, I found that the number of years that a quango existed in government could predict the likelihood of receiving the reform decisions. For instance, the longer a quango has existed in government, it is more likely to receive a decision to be retained vis-à-vis receiving the most extreme decision of being abolished. However, my analysis has also found that the financial aspects of the individual quangos (annual government funding, annual gross expenditure, number of full-time equivalent employees) cannot predict the reform decisions for the quangos in any conventional level of statistical significance.
What do these findings mean? First, the Public Bodies Reform is a politically motivated act of the Coalition Government to reduce and remove the legacy left in government by the Labour Party. By abolishing the quangos in policy areas where there are greater ideological policy conflicts, the Coalition Government is trying to ensure that the policies made by these quangos remain under the political control of the government. Nevertheless, the government is not in complete freedom when selecting which quangos to abolish or reform. The longer a quango exists in government, it gains expertise, prestige, close networks with various interests, and other assets, which are turned into sunk costs that the government has to consider. In order to minimise the sunk costs, the government is more willing to abolish the quangos that are more recently established, which are more likely to be the ones created under the recent Labour governments. Lastly, although the name ‘quango’ seem to suggest detachment from or protection against the politics happening at the top of the government, the public policies made and implemented by the quangos are not free from these political influences. As mentioned in Professor Peter John’s blog post, public policy is very much intertwined with politics.