Britain to scrap 192 state bodies to cut costs

Britain to scrap 192 state bodies to cut costs
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First Published: Thu, Oct 14 2010. 04 26 PM IST
Updated: Thu, Oct 14 2010. 04 26 PM IST
London: Britain is to abolish, merge or reform 481 semi-independent state agencies to cut spending and help cut its deficit, under a plan that will cost thousands of jobs and change the way many services are delivered.
The overhaul of what the government calls “arm’s length bodies” because they are not under direct ministerial control will affect agencies with a wide variety of responsibilities ranging from competition to child protection to renewable fuels.
“It will save money, but that is not the principal objective of it, actually. The principal objective is to increase accountability,” Francis Maude, the minister in charge of the reforms, told BBC radio.
The two-party government of conservatives and liberal democrats that came into power in May had pledged in its coalition agreement to reduce the number and cost of arm’s length bodies as part of its deficit reduction strategy.
Britain’s budget deficit stands at more than 10 % of Gross Domestic Product (GDP) and the coalition has set itself the goal of almost eliminating it in five years.
That means deep cuts in public spending, many of which will be detailed when a comprehensive spending review is unveiled on 20 October. Among the controversial measures already signalled are cuts to child benefits and increases in student tuition fees.
Maude said Thursday’s announcement on arm’s length bodies was only the start of a complex reform process and he did not yet know exactly how many jobs would be lost or how much money would be saved.
Those details would emerge as the situation of each individual body was worked out over coming months, he said.
MERGERS
Official documents released by Maude’s ministry, the cabinet office, said it had reviewed 901 bodies in recent months. Of those, 481 faced substantial reform.
The documents showed that 192 of the agencies would cease to be public bodies. Their functions would either be brought back into central government, devolved to local government, handed to charities or the private sector, or scrapped altogether.
A further 118 bodies would be merged down to 57. One high-profile example would be the merger of the competition functions of the office of fair trading and the competition commission.
The cabinet office said that would strengthen the competition regime by forming a single competition and markets authority.
A further 117 arm’s length bodies would be retained but substantially reformed, while 380 would be retained and 40 more were still under consideration, the cabinet office said.
Maude presented the sweeping reforms as more than just a cost-cutting exercise. He said they would improve transparency by bringing all state activity back under the responsibility of politicians who could be held accountable.
“What has happened in recent years is that there has been a great tendency for the government just to set up new bodies, so-called arm’s length bodies, often just to avoid ministers having to make difficult decisions and defend them,” he said.
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First Published: Thu, Oct 14 2010. 04 26 PM IST
More Topics: Britain | Abolish | Merge | Reform | Francis Maude |