In Defence of Quangos

This is the written evidence i presented to the PASC back in 2011 on the so-called cull of quangos, setting out why they are an important part of any democratic state:


why arms-length bodies are a vital part of our democratic system of public administration and what should be done to organise them better.


This submission to the PASC is based on 20 years of research[7] and practical experience of working on and with a wide variety of “arms-length bodies”—agencies or quangos—both within the UK and internationally. This work is detailed in a long series of publications, the must important of which are listed at the end of this paper.

This short paper will focus on so-called “executive”bodies—ie those primarily concerned with the delivery of various types of services and as opposed to advisory or regulatory bodies. The arguments regarding advisory and regulatory bodies are in some ways similar, and indeed even stronger with regard to the need for appropriate distance between elected politicians and specific judgements. But the main focus here is on “service delivery” agencies of various types, some of which combine delivery, advisory and regulatory functions (eg tax collection agencies).


The governments’ review of quangos has concentrated almost exclusively on NDPBs, which are only one class of what the Institute for Government have chosen to call “arms-length bodies” (ALBs). There has been a great deal of international policy-maker and academic debate about how to precisely classify such bodies, but however they are defined it is obvious that all advanced democracies, and many other states too, make use of a variety of organisational forms that are outside of traditional “ministry” type structures.

In the UK, it is quite clear that some of the distinctions between classes of organisations are both blurred and often unhelpful. For example, by the mid-1990s the only major difference between civil service “Executive Agencies” and “Executive NDPBs” was their legal status—both had been reconfigured along “Next Steps” lines (more about which below under “managerial reasons”).

For ease I will use the term “arms-length bodies” or ALBs for the whole category and quangos or NDPBs for the specific sub-set which the Government have considered in their review.

I will concentrate in the paper on issues to do with why, and how, ALBs can best be established and organised rather than on the tests that should be applied as to whether the function they organise should be done by government at all. Most ALBs will still be with us after the current cull, and we should be thinking about why that is and how best to manage them, not just focussing on how to get rid of them, which has proved (yet again) far harder in reality than in rhetoric.


There are numerous reasons why all OECD countries have a plethora of ALBs, the most fundamental of which have to do with the nature of representative democratic systems.

Political scientists have developed the idea of “losers consent”—the notion that for democracy to function those parties and voters who “lost” elections have to agree to go along with the decisions of the “winners”. They have to obey the laws, pay the taxes and abide by regulations they themselves may oppose. In order to maintain this consent an important aspect of public administration has evolved—the idea of a neutral public administrative apparatus that is simultaneously under majority democratic rule but also represents a more universal, apolitical, “public interest” that embraces both majority and minority.

All public bodies—from the civil service through to public corporations—embed this basic tension between democratic responsiveness and universal appeal to some extent, but with slightly different balances, often related to just how distant they are from direct political control.

Typically, for example, police forces and tax collection agencies are more “neutral”, at greater arms-length, from elected politicians than say education or health functions. But each has to balance democratic responsiveness against a more universalistic public interest.

As I have argued previously to this Committee[8], this creates what has been called a “conservator” role for public servants—sometimes having to defend public bodies against the inappropriate, illegal or unconstitutional exercise of political power. Public servants have to be able to say both “yes, minister” and “no, Minister”, appropriately.

As I said in oral evidence to the Committee, probably the most common public function in OECD countries to be organised on an ALB basis is tax collection, for very good reasons. A strong ALB status prevents elected politicians from “getting their hands in the till” (as still happens in some countries) or interfering in individual tax decisions to advantage or disadvantage individuals (see for example some recent reported cases in Russia). That is why HM Revenue and Customs and its predecessors were not only “non-Ministerial Departments” (NMDs) but also the only large public bodies in Whitehall established, like NDPBs, on a statutory basis. One of the reasons we have a relatively high level of tax compliance (as contrasted to countries like, say, Greece or Italy) is precisely because we have managed to maintain this clear “public interest” status of our tax collection system. In my view, these fundamental advantages of having varying degrees of “arms-length-ness” to our public bodies is too often neglected in debates, especially about quangos.

A related function of ALBs is to provide a degree of “check and balance” within the policy-making processes within Government. ALBs are often used as a means of bringing expert and/or independent opinion into decision processes, and in some cases (regulatory ALBs) even delegating some decision making to them. This sometimes includes, to use the tax example again, the detailed interpretation of laws independent of direct political control. This is a neglected aspect of what in the USA is often called the “separation of powers” but is in reality the distribution and duplication of powers to ensure there are checks and balances against arbitrary exercise of power. This is a legitimate, and unavoidable, cost of democracy.

This aspect of ALBs often leads to confusion over the so-called “duplication” of functions between ALBs and Ministries. This arose, for example, the case of some of the larger executive agencies such as prisons, employment, and benefits. There was considerable debate over whether Ministries, or agencies, or both should have policy functions. In practice in most cases it was both, regardless of the formal arrangements, and for good reasons. Policy analysis driven by “delivery” agencies had a very different, and valuable, perspective to that driven by Ministry HQs, and both had strengths and weaknesses. It can be argued that Ministers are better served by hearing advice from both perspectives rather than just one or the other.

Finally, ALBs were created in the form of “Next Steps” agencies as a way of addressing the problem of diffuse accountability between Ministers at the top of departments and service delivery units, of various shapes, sizes and importance, within departments. The whole “Next Steps” philosophy—as applied to both agencies and executive NDPBs—revolved around the notion that having a direct “line of sight” between Ministers and various delivery bodies would improve the accountability of the latter to the former.


The “Next Steps” report (1988) set out cogently the reasons that Whitehall departments were generally bad at organising the delivery of those public services for which they had direct managerial responsibility. Mandarins tended to look upwards to Ministers and policy-making, rather than downward to delivery and performance. The chain of command within complex, multi-functional, Ministries often meant it was very difficult to really hold specific functions to account, or to steer them in required directions.

The solution adopted—Next Steps “agencies”—tried to overcome these problems by creating a new ALB form. Each agency had a Chief Executive who usually reported directly to Ministers, a foundational “framework document”, publicly reported key performance targets and business plans approved by Ministers, and crucially operational freedoms over internal organisation, personnel and financial arrangements. At the height of the Next Steps programme about 140 such agencies had been created, employing about 80% of civil servants.

Unlike NDPBs, agencies had no legal status separate from that of their department (which also in most cases had no specific statutory basis) and agency staff were still civil servants. But the agency principles above were soon extended to executive NDPBs and the differences between agencies and executive NDPBs narrowed considerably as a result.

The justification for all of this was that these “agenificified” ALBs could concentrate on “the job to be done” and adopt more flexible internal arrangements to achieve their aims. They would be freed from “one size fits all” constraints and give managers the freedom to manage, whilst be held tightly to account through performance targets and ring-fenced budgets. Similar arguments are currently being advanced in support of more autonomy for schools or GP commission consortia.

The Next Steps principles were not without their problems or critics (myself being one of the latter, hopefully constructively) but the underlying rationale of creating more focussed, clearly defined, organisations with clear remits, freedoms and responsibilities would, it was claimed, be both more accountable and more efficient and effective.

These principles seem to have been largely forgotten or disregarded in the current review of NDPBs. The argument that bringing functions back within Ministries from NDPBs will somehow “increase accountability”, for example, runs completely contrary to the idea that the Next Steps style reforms of executive NDPBs increased accountability and avoided the problems identified in the Next Steps report. It is entirely unclear on what this policy reversal is based.


One of the problems with the somewhat rushed review of NDPBs by the current government is that it has failed to take a broader and deeper look at the whole landscape of ALBs and think seriously about the scope for reform.

There is a great deal of randomness and historical accident about what functions have ended up where in the British state. Why tax collection, benefits payments, prisons and job-centres should all be central government and civil service functions is unclear. In all these cases there are examples of radically different distributions of functions in different OECD[9] countries that appear to work well. Equally, why some bodies are NDPBs rather than agencies, or indeed public corporations, is often unclear.

Tax collection is most often organised nationally, in a “strong” ALB form, but in Denmark it is organised through local government, which also distributes most benefits. The Government has decided to “nationalise” housing benefits, taking away from local government its single biggest benefits function without it appears any consideration of alternatives. The proposed mainly centralised, and on-line, organisation for Universal Credit ignores some of the negative administrative lessons of the Child Support Agency, where remoteness and difficulty of access were major factors in stoking up resentment against the Agency.

In many countries prisons, for example, are split between national and local systems (and indeed we have two local systems in Scotland and Northern Ireland). There is a strong argument that for minor offenders on short-term sentences (the majority), having a strongly integrated local prisons and probation regime makes much more sense than a somewhat impersonal national system. I merely cite this as an example of where serious thought to radical alternative designs might be considered that perhaps would offer much better solutions to the problems public bodies are set up to tackle.

Governments have often shied away from really fundamental reviews of the whole system of public administration. When the “Next Steps” review was published in 1988, for example, it recommended that executive functions might be considered for agency, NDPB or public corporation status, or indeed abolition or privatisation. In practice, between 1988 and the mid-1990s only “executive agencies” were created and no functions were transferred to any other status, limiting the scope of the reorganisation of central government functions substantially. A few agencies were in turn privatised in the mid-90s, but they were mainly very small and were effectively replaced by new agency creations (eg EPA and MHS).

It is true that the Next Steps principles were later extended to executive NDPBs, and also applied internally within HM Revenue and Customs and Inland Revenue, but these were systemic rather than structural changes. There was no wholesale review of where functions should be located, or why, as part of the “Next Steps” process between 1988 and the mid-1990s.


All of this is not to say that there are no difficulties about the “arms-length” model. ALBs offer a different model of both accountability and management and the two most common problems focus on these two dimensions.

The “Next Steps” approach focused on creating a new, much more direct, line of accountability between elected politicians and agency managers (and much of this machinery was later applied also to executive NDPBs). The whole paraphernalia of Framework Documents, Key Performance Indicators, business and corporate plans—all of which were usually signed off (at least formally) by Ministers—was meant to hold Agency Chief Executives directly accountable to their Ministers. It soon became apparent that this approach had limitations—firstly, for many small, politically unimportant agencies the relationship between Minister and Agency CE existed on paper but not in reality; secondly, in a few cases of larger, more politically salient agencies, the quasi-contractual relationship clearly broke down (eg the prisons crisis in 1996). Although these problems are not insurmountable, they do present challenges that have still not been fully addressed.

The managerial problems stem largely from the difficulties experienced in the centres of departments in effectively managing ALBs. Our research in a number of countries demonstrated some fairly common failings:

    — the centres of ministries found it difficult to adopt an “adult” or “strategic” relationship with their ALBs, often either resorting to over-controlling micromanagement (the authoritarian parent) or a “hands-off” approach bordering on a lack of interest (the liberal parent);
    — Ministries often had a bewildering set of different relationships with a myriad of different types of ALBs and understanding and switching between the differing requirements proved extremely challenging;
    — Within Ministries there were often confusing and complex sets of relationships with ALBs, with multiple points of contact and attempts at “steering” various aspects of ALBs behaviour (eg by different functions within the Ministry—personnel, finance, operations, policy, etc);
    — Problems of coordination and “turf-wars” between agencies with overlapping responsibilities often arose—it was not just in Britain that the issue of “joined-up government” came to the fore as more ALBs were created;

This is not a complete list, but it does suggest some of the difficulties.


ALBs are not perfect—like all other forms of public administration they have strengths and weaknesses. Nor are there any obvious universal formulae or prescriptions that would say when ALBs are an appropriate form of organisation as against any other.

A review which starts from the premise that ALBs are inherently “wrong” in some way is however itself deeply flawed. It ognores the very good reasons many ALBs were established in the first place. History demonstrates such “reviews” often deliver far less in reduction of ALB numbers and costs than at first envisaged. Moreover the trend has been for ALB numbers to grow again within a few years, as the original drivers for their creation reassert themselves.

The current government has shown itself willing to consider radical change in other areas (eg education, health and welfare benefits). It is a pity it has not considered a more thorough, principle-based, careful and long-term reform of the ALB landscape that just might deliver real, enduring, benefits.

BIBLIOGRAPHYJohnson (Talbot), C L and C R Talbot (2007). “Seasonal Variations in Public Management: disaggregation and reaggregation.” Public Money & Management 27 (1).

Pollitt, C and C Talbot, Eds. (2004). Unbundled Government: A Critical Analysis of the Global Trend to Agencies, Quangos and Contractualisation. London, Routledge.

Pollitt, C, C Talbot, et al. (2004). Agencies—How Government’s Do Things Through Semi-Autonomous Organisations,Palgrave.

Talbot, C (2004). “Executive Agencies: Have They Improved Management in Government?” Public Money & Management 24(2): 104-112.

Talbot, C (2002). So Who Needs Agencies? Pontypridd, University of Glamorgan (for UK Department of International Development).

Talbot, C and J Caulfield, Eds. (2002). Hard Agencies in Soft States. Pontypridd, University of Glamorgan (for UK Department of International Development).

Talbot, C (1997). “UK Civil Service Personnel Reforms: Devolution, Decentralisation and Delusion.” Public Policy and Administration 12 (4).

Talbot, C (1996). Ministers and Agencies: Control, Performance and Accountability. London, CIPFA.

December 2010

7   For example, my colleague Professor Christopher Pollitt and I led two major comparative research projects a decade ago looking at “agencies” in the UK, Netherlands, Sweden and Finland (funded by ESRC) and in Jamaica, Tanzania and Latvia (funded by DfID). Back

8   In my evidence to the professional Skills for Government Inquiry. Back

9   I will use “OECD countries” as an approximate synonym for “advanced democracies”. Back

One thought on “In Defence of Quangos

  1. I suppose one of the first and most elegant accounts of Quangos is W J M Mackenzie’s “Quangos, Networks, Pluralists, Spiralists, Commentatrors”, in Australian Journal of Public Administration, September 1980 – and in “Understanding Public Administration”, 1981. But I think I sent you my own comments at the time of your evidence – I’ll look it up! Des

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s