The bonfire of the quangos.. now, where did I put those matches? What next for Legal Services and Buying Solutions?

The leaked letter yesterday concerning the potential abolition of  quangos was interesting for both what it included and what it did not.  One notable absence from the list (which includes organisations that are being retained as well as those to be scrapped) was Buying Solutions, the arm of the Office of Government Commerce that puts contracts in place for use around the public sector.   Not mentioned at all which seems a little odd.

But the Legal Services Commission (LSC) was reported by the media as being on the 'abolition' list, although what the list actaully says is this:  "Abolish as NDPB - change to Executive Agency..."

As I know a bit about this,  I'll use it as an example of why these changes are not always what they seem and why taking cost out of the public sector is difficult.

The LSC is fundamentally a procurement and contract management organisation.  It manages the annual £2.1 billion expenditure on Legal Aid.  That is spent through literally thousands of suppliers and contracts, and covers criminal legal aid in courts and police stations, legal advice on family matters, and more contentious purposes such as advice to asylum seekers or prisoners.  The vast majority of the population think that some element of it should be cut.  But you never know; one day, if you're picked up by a 'bent copper', or the local authority takes your kids into care because someone saw you shouting at them in the street; you just might be very glad it's there.  Anyway, end of commercial.

But it is very complex - the entitlements, working out how much the legal firms should be paid (particularly for  long, complex cases), running procurements under EU regulations and so on.  And the LSC has some roles that are outside 'normal' commercial contract management in areas such as policy and research for instance.

So, does the LSC annual running cost of around £120 million - just over 5% of the third party spend they manage -  represent good value?   I don't know.  However, what I do know is that you can abolish the organisation, but you can't abolish its functions and activities.  Someone has to put in place these contracts and manage the whole process from strategy through to payment and supplier management.  Maybe it shouldn't cost £120 million; but unless you want to put £2.1 billion in £20 notes into a large pile and let the legal profession fight to the death for their share (and I know that is a deeply tempting idea), I suspect you'll end up spending something close to that.  Unless you re-engineer the whole legal aid process that is, which is probably a very good idea; but you won't achieve that by 'abolishing ' the LSC.

So it is likely to transfer into the Ministry of Justice as an Agency, as the Magee report suggested.  I'm personally not against that as a strategic decision for a number of reasons, but is that going to save money?  Be more efficient?  Well, I don't personally perceive the MoJ as a paragon of smooth, well-oiled efficiency; they seem to do some things well (including some aspects of their procurement work) and some less well in my experience.  There may be the opportunity to rationalise some support services for instance, but their is no synergy around the core contract management activities, and there will be some negatives of such a move; potential issues around staff, pensions, governance and just the usual transition costs that could all add up to a significant amount.

Don't therefore get too excited as a taxpayer when you see bodies being 'abolished'.  Ask the two key questions; what is happening to the functions and activities of that body; are they really disappearing?  And if they're not, what is the total cost of delivering those under the new structure (whatever it is) compared it the old?  The answers will tell you whether the change is genuinely effective or political window dressing.

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Voices (5)

  1. Peter Smith:

    Agree with the cost of change poiint – one of the best things in my view that the Coalition has done is say that Miisters will stay in place for a decent amount of time. Constant Ministerial changes – which inevitably lead to changes in policy – are a huge reason for project and programme failure in my experience!

  2. Christine Morton:

    I agree wth Dan. I’ve never met a government body, local or central, that didn’t restructure every two years!

  3. Dan:

    Agree on all points. Don’t forget that when the press release of ‘200’ quangos being cut that a proportion of these were (i) already in process of being abolished or had been announced as closed e.g. Food from Britain/Commission for Rural Communities; or (ii) are little more than smoke and mirrors e.g. Inland Waterways Advisory Council (which if you look at their annual report looks to have two staff – so what?).

    Having said that though, I think changing the organisational model of Government to more centralised command and control will avoid the cost of change in the future. The constant cycle of setting up, merging and moving commissions/agencies/NDPBs must have generated massive amounts of spend over the past few years. Perhaps after the embers have cooled down on the bonfire, one of the best commitments the government could make is to reduce the amount of change?

  4. Christine Morton:

    I find the timing of the “leak” interesting – as if it will all blow over during the weekend. Ah such a skeptic am I..

    I do loathe.. LOATHE… when things are described as “less well.” Were it that we would be able to say “poorly” in the public sector!

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