Dan Lewis: We should cull the quangos to get effective government

Quangos, or non-departmental public bodies as they are more formally known, matter. A big area of government of which we collectively still know little, the last official and complete Cabinet Office report of 2006 put their total expenditure in England at 167bn.

In many cases these resources – our taxes – are handed down by the Treasury to the sponsoring government department, who then pass it down as grant-in-aid to a body like the Environment Agency or the Legal Services Commission. Roughly two-thirds though of these budgets are geared towards health and education. Quangos then are at the front line in the distribution of the lion's share of Briton's most cherished public services and all too bureaucratic and inefficient they are too.

David Cameron, to his great credit, understands that. That's why by far the most important reform of the coalition – scrapping the Primary Care Trusts and Strategic Health Authorities and giving budgetary control directly to GPs – could turn out to be the most radical increase in government-financed productivity since records began. It is unlikely, for example, that GPs will spend anything like the 300m that these NHS bodies did on management consultants.

Equally, Michael Gove in his efforts to bypass the education quangocracy and let parents set up their own schools that run their own budgets, should be applauded. As a former school governor, I can attest to my postbox groaning incessantly with the weight of related mailings from the Department for Education's sponsored bureaucratic quangocracy.

Under Tony Blair and Gordon Brown, establishing quangos became a preferred policy response. A Minister was able to show action and that their heart was in the right place by setting up a public body with a great sounding name and a flashy website. After all, that was the response of Ruth Kelly to Jamie Oliver's documentary on school dinners – setting up the School Food Trust.

Back in 2005, I came in for some stick for daring to call some quangos useless. Perhaps sub-optimal would have been a more charitable term. But of my nine most useless quangos, three – the Agricultural Wages Committees, the Wine Standards Board and Investors in People – look set to be culled and two more are slated for review, including the British Potato Council which now operates under the Agricultural and Horticultural Development Board.

Even some of the mergers I proposed such as UK Sport and Sport England are going ahead. However, this latest list doesn't go anywhere like far enough.

It's not just the cost and inefficacy of quangos that are a cause for concern. Many complain that quangos are politically unaccountable and unelected. True, but that's not quite the point. They never will be because senior appointments are invariably made by Ministers on the basis of a short-list drawn up by civil servants. And after that, even if the same Minister is in post, they just won't have time to keep tabs on their performance, less still get rid of them.

There's also a continuous rollercoaster ride of rebranding, changing sponsoring departments and a labyrinthian intra-quango funding scheme.

Take the "Office of the Children's Commissioner" which was set up to promote the views and best interests of children and young people in England. That name was then changed because a survey of children said they found the name "seriously boring". So it became "11 Million" to denote the number of children in the UK. Well last year, it changed name again to The Children's Commissioner for England, complete with new websites, logos and presumably stationery. Well let's hope the children like this name.

Then there's an enigma style intra-quango funding network. Instead of funding public services directly to the public, many bodies create another layer of bureaucracy by funding other quangos to do work for them. All at much greater cost to the taxpayer.

And while some quangos must inevitably remain, we should keep them accountable by appointing them on a time-limited basis – and subjecting them to competition for the renewal of their contracts.

As things stand, quangos are set up in perpetuity. This has led to the recent nonsense of the newly-axed Qualifications and Curriculum Authority signing a 10 year lease for a new building in Coventry in March 2010. We're all on the hook for that one.

Only when we have proper scrutiny of quangos and open their provision of public services to competition can we start to deliver cost-effective government.

Dan Lewis is chief executive of the Economic Policy Centre.