Cabinet Office minister says government is on track to abolish 204 public bodies by 2015 under scheme to save at least £2.6bn
See a list of the abolished quangos
More than 100 quangos have been abolished since the government took office, saving the taxpayer at least £1.4bn by 2015, according to Francis Maude, the Cabinet Office minister.
But he said the one-off transition costs associated with the programme – described by the National Audit Office (NAO) as the largest restructuring of public bodies for many decades – could be as much as £900m, which is higher than some original estimates.
Maude said the government was on course to meet its aim of abolishing 204 public bodies by 2015, and said this would create a net saving of at least £2.6bn – although the NAO said in a report this year that departments had failed to explain precisely how these savings would be achieved.
David Cameron said before the general election that promising a “bonfire of the quangos” would be too simplistic, but the phrase has often been used to describe the coalition’s plan to abolish or merge many of the 900 public bodies it inherited.
When parliament passed the Public Bodies Act last year, giving ministers new powers to abolish quangos, Maude said this would save £2.6bn. In a progress report on Wednesday, he said 106 public bodies had already disappeared. A further reduction in the quango count has been achieved by merging more than 150 bodies into fewer than 70.
The Cabinet Office said the cuts already implemented would save £1.4bn by 2015, after transition costs such as redundancy payments are taken into account. It aims to have abolished 204 bodies by the end of this parliament and to have reduced the quango count by a further 100 through mergers.
In its January report, the NAO accused the government of underestimating the transition costs. “Departments’ estimates of £425m for the transition costs of these reorganisations are incomplete,” it said. “[The NAO] estimates that they will be at least £830m.”
Now the Cabinet Office says it expects the transition costs to be “between £600m and £900m”.
A spokeswoman said the government had never publicly used the £425m figure quoted in the NAO report because it was a partial figure covering only some departments.
She said there was no need for the government to revise down the £2.6bn figure for projected net savings because when the Cabinet Office first quoted this it was assuming transition costs of £600m-£900m.
In its report, the NAO said many of the quangos being earmarked for closure were not a burden on the taxpayer. Of the £2.6bn due to be saved, 34% was coming from two cuts, the abolition of regional development agencies and of the British Educational Communications and Technology Agency, the NAO said. It pointed out that two-thirds of the quangos being abolished spent nothing in 2009-10.
Maude said the £2.6bn target was the equivalent of £150 saved for every working household in the country.
“In 2010 we inherited a bloated quangocracy that had spiralled out of control. Not only were these unaccountable bodies costing the taxpayer billions, but they were duplicating bureaucracy,” he said.
“Once we have completed the planned closures and mergers, we will continue to review all remaining quangos to ensure that never again will we end up with so many of these vast bureaucratic and unaccountable bodies.”