Government by quango

Part one of a series on austerity and managerialism.

This is part one of a three part series on how some of the mismanagement, missed opportunities and political choices of austerity lead to the managerial politics of today. Links to the other parts are below.

It’s hard to foresee how, exactly, history will remember David Cameron. Certainly as one of the most consequential Prime Ministers of the era, perhaps as the last flash in the pan for ‘Third Way’ politics, perhaps as the last man to create a stable, electable Conservative Party government.

Personally, I’ve always though he’ll be remembered -as leaders in times of turbulent transition often are - as something of a political Pandora.

It’s a common feature of revolutions that, as Mike Duncan puts it, ‘the men who unlocked the door are not always the same man who come bursting through.’ Cameron unlocked the door to some pretty sizeable challenges, whose scale and intractability we’re still dealing with; Brexit, Scottish devolution, entrenched social progressivism and the green agenda.

Austerity was one of those challenges but - unlike those listed above - its prevalence has waned significantly since Cameron left office. That’s because the public largely accepted austerity as a painful but necessary political programme; Cameron headed into the 2010 election being honest about the coming 'new age of austerity', warning a year before the election that the country would ‘have to take some incredibly tough decisions on taxation, spending and borrowing.’ Even half a decade later, the ‘Long Term Economic Plan’ may have become a meme but it still resonated with the public. They agreed with the fundamental assertion underpinning austerity; that, as Cameron put it in For the Record, ‘far worse than administering the medicine would be failing to take action.’

Looking back on austerity in the same book, Cameron looks back on the missed opportunities of austerity:

My assessment now is that we probably didn’t cut enough. We could have done more, even more quickly, as smaller countries like Ireland had done, to get Britain back in the black and then get the economy moving. Those who were opposed to austerity were going to be opposed — and pretty hysterically — to whatever we did. Given all the hype and hostility, and yes, sometimes hatred, we might as well have ripped the plaster off with more cuts early on. We were taking the flak for them anyway. We should have taken advantage of the window of public support for cuts when it was open.

But it wasn’t just the scale of cuts that was a missed opportunity. In the 2013 essay ‘Destiny of the Nation State’, Johanna Möhring wrote:

The ongoing economic and financial crisis is forcing us to review critically the way in which politics has been orchestrated over recent decades. Day-to-day politics had increasingly become couched in terms of universal principles, blurring the essentially confrontational nature of politics. Wherever there is a winner, some other party stands to lose. Officially guided by such worthy causes as equality and fairness, the fact that each political measure carries a price tag that someone has to pay in the end could be conveniently overlooked.

This is now no longer a possibility. Politicians will be forced to move away from abstract universal values to address concrete realities, namely what tasks should stay with the state to be financed collectively, and how each national economy can create enough resources to be able to do so. This return to reality may be bumpy, but it will bring back the zest to politics.

Austerity didn’t bring back the zest to politics, however. It bought managerialism. The great missed opportunity of austerity was that it failed to review critically the way in which British politics had been orchestrated; it never questioned what the government did, only what it spent on it. It failed to contend with how the engines of growth could sustain the government in the future and, finally, it distributed the price tags of political choices along political lines. This inevitably bought managerialism; austerity was an opportunity for conservatives to reduce the overweaning influence of the state by, to paraphrase Henry Wilson, ‘coming out of those places that don’t belong to us & hanging like hell to those places that do.’ The failure to grasp this means one of the primary tasks of post-austerity politics has been how to manage an overlarge state that does too little of too much.

At the time, much of the left characterised Cameron’s austerity programme as a monstrous inhumanity. But this message never really cut through to the public, largely through the government’s careful management of the political trade-offs; Cameron recognised the need to build consensus around austerity by making cuts that were, individually, not controversial enough to throw the whole programme off course. On the Record, again:

What didn't work were reforms that people either didn't back or couldn't see the logic of. These were the things that Oliver Letwin would caution against as ‘tiny atomic explosions' - where the outrage was not worth the saving.

Cameron uses the plans to sell of the Public Forest Estate as an example, which was shelved after a campaign led by 38 Degrees put enough political pressure on the government to reverse course. Not all of Cameron’s targets were so lucky; after less than half a year in government, the much-vaunted ‘Bonfire of the quangos’, had reviewed 902 quangos and slated 200 bodies for abolition, 120 for merger and 176 for substantial reform.

But beneath the headlines, the reduction in quangos was purely a numbers game. The impressive number abolished covering the fact that the programme sought to reduce the costs of quangos by cutting the number of them, rather than their functions. As Katherine Tonkiss and Katharine Dommett wrote in 2013:

While this [the numbers of quangos abolished] denotes substantial progress on this objective, most bodies abolished thus far have been smaller advisory bodies and many functions have survived, being transferred into departments, executive agencies or merged into the remit of other bodies. Accordingly, while the numbers of arm’s length bodies is reducing, the scope of government is not necessarily shrinking.

Many of the abolished quangos had their powers and functions absorbed into government, rather than being eradicated entirely. In fact, the original Public Bodies Reform – Proposals for Change report (embargoed until 9.35am 14/10/10!) made a paltry 32 recommendations to abolish both body and function.

Abolishing quangos by absorbing their role and function into government meant more governmental control, but not reduced costs; according to the National Audit Office, this transfer of power and function resulted in huge costs of £830m, double the initial ministerial estimate. The NAO also expressed concern that there was insufficient grasp ‘of the continuing costs of the functions that were being transferred from bodies that had been abolished to other parts of government.’ The savings - both short term and long term – that could have been made could have help cushion some of the more brutal cuts of the austerity programme.

Quangos and arms-length bodies are a difficult, undefined sector of semi-public, quasi-governmental bodies, and their innate opaqueness makes it difficult to categorise them as a whole. They are not inherently bad; some perform vital and specialist functions should be performed at arm’s length, or offer government necessary technical and independent advice. But without questioning the fundamental function, cutting back government spending on quangos was like handing out speeding tickets at the Indy 500. As a result of this failure, the cost of arms-length bodies has actually tripled in the decade following the 2010 review. Since, both Boris Johnson and Liz Truss have sought to tackle the still bloated sector. Johnson even went so far as to order Jacob Rees-Mogg to lead a plan to reduce the costs of public bodies, which were rising too fast even for Johnson’s cakeist instinct and costing the taxpayer £220 billion last year. Rees-Mogg, it appears, got what Cameron didn’t and in a letter to secretaries of state, he wrote:

Necessary public bodies are an important delivery mechanism for the Government. The cost and number of these bodies continues to increase. Public bodies should only exist when there is a pressing need, must be accountable to Parliament and be efficient and effective. Please review your public bodies for any that you consider could be provided by organisations other than the state and therefore closed.

Cameron had the political capital to do the same; to go even further, perhaps. He had the political room to create a permanently streamlined state, taking bold actions like outsourcing solely bureaucratic functions of government (like those performed by the DVLA), privatising or spinning off successful arms (like the BFI or Channel 4). With historic hindsight, this would have had the added advantage of preventing the situation in which a Conservative government subsidises its’ ideological opponents with millions of taxpayer pounds a year.

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