Public Bodies Bill [HL]

Lord Marlesford Excerpts

Tuesday 9th November 2010 Lords Chamber

[Lord Marlesford]

My Lords, this Bill is clearly flawed. It may even be deeply flawed. However, we have heard much about the flaws and I want to focus on the purpose of the Bill, which I believe to be urgent and important. It is nothing less than to improve a great swathe of state activity by making it more relevant, less intrusive and more cost-effective. The Bill reflects the 2010 manifestos of both coalition parties.

First, I declare my own interests. Declaring interests can reveal the experiences which tempt one, perhaps even qualify one, to comment in debate. I was for 12 years a countryside commissioner and for eight years a rural development commissioner. Those two quangos—the Countryside Commission and the Rural Development Commission—were long ago absorbed into Natural England. I was subsequently, for five years, the chairman of the Council for the Protection of Rural England, which is not a quango but a pressure group, and unashamedly so. For the past 10 years, I have been president of the Suffolk Preservation Society, which is a county branch of the CPRE.

The basic purpose of quangos, and indeed other bodies with delegated powers, is to advise government on public policy and improve their administration. There are four elements to it. The first is to hive off to separate management some government functions, as authorised by Parliament. This is to ensure that scarce Civil Service talent, normally recruited for policy advice rather than management of resources, is not diverted to managing special and often very technical functions. The second is to support and inform the political judgment of overburdened departmental Ministers by bringing in part-time appointees as the governing bodies of the quangos with sensitivity to the political perspective of the elected Government. The third is to identify and, where possible, anticipate particular problems within the remit of the quango and to advise Ministers on how to deal with them. The fourth is to be the recipient of, and to evaluate, the views of pressure groups in their field and to advise Ministers how they should react to the demands of those pressure groups. That is a crucial role for the governing bodies of quangos.

I say at once that a number of quangos are doing a very fine job. However, the problem is that some have grown to have a culture, ethos and agenda of their own, often quite different from the aims and policies of the Government of the day. They have become empire-building special-interest groups, and members of the governing body have sometimes “gone native”, no longer exercising proper control over their staff or the use of resources.

In making its case, a pressure group overstates that case—in as covert a manner as may be expedient. It does this to get the appropriate action and resources to implement its objectives. It is not there to have a balanced view on what should be done. Its legitimate role is to get the biggest share of the cake that it can and to negate other interests, private or public, if they get in its way. Therefore, it is obvious that if a quango gets too close to a pressure group or, worse still, behaves as a pressure group either in administration, expenditure decisions or, most of all, in advice to Ministers, it can become counterproductive and lose all sense of proportion. The imposition of disproportionate compliance costs on either other government agencies or the private sector is an example.

A weak Minister—and all Governments have them—will have little hope of bringing a deviant quango under control. Resources will be misused and policies distorted. Quangos can be harder than government departments for Parliament to control because their governing bodies are not directly answerable to Parliament. Thus, quangos can add to the democratic deficit.

This Bill is one of the measures that the Government are taking to deal with the budget deficit, so let me stress a point which should be obvious to all, although I have found it to be generally unrecognised by the quangos themselves. However, once it is made it is not denied. It is that the cost to any business, whether corporate or private, of compliance with the mandate of quangos is a business cost and therefore tax-deductible. That means of course that a proportion of that cost—up to 28 per cent if it is corporation tax or up to 50 per cent if it relates to a sole trader such as a farmer—comes directly from the Exchequer. Compliance costs therefore reduce the tax collected by HMRC and make the balancing of the budget that much harder. Therefore the Government of the day have a shared interest with both business and the public in ensuring that regulation, and thus the cost of compliance, is minimal and, above all, proportionate.

It has become increasingly apparent that some quangos, and some of the specialised departments of both central and local government, have been behaving, especially in their regulatory role, in a disproportionate, intrusive and sometimes insensitive manner. At times this seems to reflect the systemic arrogance of bureaucrats; sometimes it is simply the jobsworth attitude of rather second-rate individuals who have been nestling in the protective cocoons of their organisations. More recently, some of them have behaved as though their function, or at least their opportunity, is job creation. With the credit crunch, job preservation at all costs has become their priority. These are some of the things that explain some of the opposition to measures in this Bill.

I shall illustrate my case with one quango which has, in my view, behaved with scant regard for the public purse and with little sensitivity to public opinion. Proportionality is quite absent. To it, the life of one bat or one great crested newt is worth expenditure without limit; the opportunity cost, in terms perhaps of kidney machines for humans, does not occur to it; and it acts as the instrument of its pressure group clients such as the RSPB. I refer of course to Natural England. The story of how that quango imposed on another quango, the Highways Agency, a cost of £600,000 to build two bridges for bats over the new Dobwalls by-pass in Cornwall caused indignation on a national scale. That was cash which came straight out of the Exchequer. I am sure that we have all heard of the cases where new public buildings such as schools and hospitals have to pay thousands of pounds to cope with the possibility that their plans might interfere with great crested newts. In Suffolk, Natural England proposed, in cahoots with the RSPB, to introduce to our coastline white tailed sea eagles, whose natural habitat is the islands off the Scottish mainland, to the fury of local pig farmers, of which I hasten to say I am not one. That particular nonsense was halted by the new chairman, a sensible farmer, Paul Christensen. I hope that he will welcome the much needed cut in the budget of Natural England.

The amalgamation of quangos may not be a solution. Those on the governing body, especially if they are to apply their wisdom and experience, have limited time available. They have busy outside lives. If they are to be fully effective the scope of the quango must not be so wide that they cannot follow, monitor and control the quango. Smaller more focused quangos, perhaps sharing administrative overheads with others, may be more cost effective. Thus a reduction in the number of quangos is not necessarily a good test of this Bill.

I am sure that we have to improve this Bill, but I believe that the intentions behind it are sound and action is well overdue. I support the intention of this Bill and I support the need to improve it, but I shall not support proposals to delay it.