Quango bonfire ‘just heating up’

David Cameron's bonfire of the quangos is now saving the taxpayer £1.4 billion a year, ministers have claimed, but the figures are being disputed by MPs.

Cabinet Office figures released today showed a total of 106 public bodies had been shut down so far, while 150 others had been consolidated and merged into fewer than 70.

Regional development agencies and 11 school bodies have already been closed as part of the cuts, which the coalition hopes will eventually lead to the demise of 204 quasi autonomous non-governmental organisations.

That would lead to total annual savings of £2.6 billion.

"In the past, people just talked the talk on quango reform," Cabinet Office minister Francis Maude said.

"We took swift action by legislating to enable departments to deliver long-overdue reforms by closing down unnecessary public bodies."

The government says its savings from the bonfire of the quangos will eventually equate to £150 per household.

But earlier this year the influential public accounts committee declared the £2.6 billion figure to be "incomplete and imprecise".

MPs reported that many of the savings would simply be the result of cuts to services rather than genuine savings as a result of reduced bureaucracy.

"The estimated costs of closing bodies, including payments for redundancies and pensions, are incomplete," chair Margaret Hodge said.

"And not enough account has been taken of the continuing additional costs to other parts of government of taking on functions previously carried out by the abolished bodies."

The Cabinet Office pointed out the same report had also called the government's reforms of the quango landscape "the largest restructuring of public bodies for many decades" and said it would have a substantial and lasting impact on how public money is spent.

Maude added: "Let's be clear when it comes to shrinking and streamlining the quango state there's plenty more to come."

Both coalition parties supported cutbacks to the quangos which had built up under the New Labour government. By 2015 their total number will have fallen from 904 to around 635.