Public Bodies Bill [Lords]

Debate between Mark Lazarowicz and Lord Harrington of Watford

Tuesday 12th July 2011 Commons Chamber

[Richard Harrington (Watford) (Con)]

The hon. Member for Birmingham, Erdington (Jack Dromey) mentioned the tragedy of the Morecambe bay cockle pickers and, in his opinion, the disastrous consequences of losing the GLA and other organisations in rural England. However, I do not understand Opposition Members and members of the previous Government. They have spoken a lot about saving money from quangos. The right hon. Member for Birmingham, Hodge Hill (Mr Byrne) spoke of £500 million, which the shadow Minister, the right hon. Member for Dulwich and West Norwood (Tessa Jowell), confirmed earlier. On the one hand, Opposition Members accept that we need to cut because money is being lost, yet almost every organisation that is mentioned seems to be a front-line service that it would be a disgrace to remove. I find that a difficult contradiction.

I must tell the House—and in fear of Opposition Members’ mirth—that I have not worked in a quango or experienced them on close terms. However, I do know about organisations. Organisations, be they in the private sector, the public sector or the quasi-public sector, have certain things in common. One is that they all started with perfectly good intentions, but they have a habit of growing like Topsy, until they get to the stage when people think, “Well, how can we possibly do without them?” That happens a lot in the private sector, and it has clearly happened in the public sector. Whether we are talking about new management in a business or a new Government running the country and the public sector, the feeling is the same: when times get difficult, measures have to be taken to reduce the number of organisations. It is well known in management, and there is management speak for it—management cuts, rationalisation and so on. There seems to be consensus on that.

The shadow Minister said that every Government needed to reassess the role of these organisations. In her view, it needed to be done “systematically over time”, but I am not sure whether that means two years, five years, 10 years or longer. The fact is that a new Government have entered office, carried out a comprehensive review and decided to proceed in this way predominantly—as far as I can see—on the grounds of accountability and transparency, with the peripheral object of saving money. I do not understand her logic in saying that it can be done over a lengthy period. These organisations are growing up all the time.

The right hon. Lady seemed to agree that measures have to be taken to rationalise the number of bodies. However, I want to move on to the questions of accountability and transparency, which are the main thrust of the debate. There are arguments about whether organisations are better controlled directly—from within Departments—or indirectly. I have experience in Watford of bodies that have been spun off and that are effectively quangos. For example, the Community Housing Trust, which was part of the local council, is now a third-party organisation and quasi-controlled by the council. In that respect, it is much the same as a Government quango. Management teams grow up, outside consultants are used all over the place and very high salaries—in many cases higher than in the private sector—are paid, but I have not seen the accountability. Having a couple of non-executives on a board does not mean accountability and responsibility in the same way that direct control by the Government or—as in the case of my local authority example—a council does.

The idea, once mooted for quangos, that some organisations work better independently—so that Ministers cannot meddle—was admirable, but I have not seen accountability. In fact, I have seen the contrary. I would like to use regional development agencies as an example because I have experience of them from my business life. It seemed to me that not only were they not accountable to, or directly controlled by, the Government—they had an independent board and claimed some sort of independence—but because their funding was controlled by Governments, they could say to their consumers, who effectively were businesses in the area, “You don’t own us. We’re independent of you and funded by the Government.” For the life of me, I cannot see how running an RDA as a quango is an excellent way of running an organisation when compared with direct involvement from the Department for Business, Innovation and Skills or with the local enterprise partnerships. The latter are at least community organisations in business terms. I very much support the Bill.

[Mark Lazarowicz]

The hon. Gentleman is making some interesting points. However, does he not see the apparent contradiction between his theory of greater state control and bringing everything into the centre on the one hand, and the policies of the big society and handing power down to people on the other?

[Richard Harrington]

Yes, I think that the hon. Gentleman has made a valid point. Some organisations are much better off in the voluntary sector and as part of the big society. It is a question of assessing, as the Cabinet Office has done, which organisations are suitable for which sector. My argument is that the quango is neither one thing nor the other. However, I agree with him; he made a valid intervention.