Ministers forced to tighten up on quangos

THE FIRST cracks have appeared in the wall of secrecy surrounding Government-appointed quangos which spend pounds 46bn a year - a third of all public expenditure.

After intense criticism from the opposition and the House of Commons Public Accounts Committee, ministers have decided to bring in reforms later this year which will allow the public greater access to information from a selected group of quangos.

They also plan to introduce a code to control the behaviour of quango appointees after a succession of scandals involving mismanagement, nepotism and corruption were highlighted in a damning report from the Public Accounts Committee in January. It detailed the waste of hundreds of millions of pounds and warned that the failings it had discovered in quangos 'represent a departure from the standards of public conduct which have been established during the past 140 years'.

Examples included the Welsh Development Agency, which flew officials on Concorde merely because they had not travelled on it before, and the managers of the Welsh Development Board, who awarded each other houses. At present just 2 per cent of all quangos in Britain follow Whitehall's code of practice on open government. The code obliges 124 unelected bodies, from the Advisory, Conciliation and Arbitration Service to the Welsh Language Board, to explain policy decisions and answer requests for information.

If they fail to meet the standards, members of the public can appeal to the ombudsman.

The Cabinet Office said that later this year the ministries controlling all the 1,389 organisations Whitehall describes as 'Non-Departmental Public Bodies' - quangos with a role in national politics - will be told they have to use the code 'as a basis of their policy'. However the ombudsman's power will not be extended and the public will have no right of appeal if they find that a policy of secrecy persists.

Quango members will also be told to meet new standards of behaviour being drawn up by the Treasury. The Treasury rules are expected to include the application of stricter financial controls and regulations to avoid conflicts of interest. A Cabinet Office spokeswoman said that the two measures would 'improve accountability'.

But Peter Kilfoyle, the Labour MP for Liverpool Walton, who has bombarded ministers with questions about quangos, said: 'This is a step in the right direction but just isn't enough.'

The Government has refused to meet Labour demands to produce a central list of quango members, complete with details of financial interests and political affiliations of the estimated 63,000 quangocrats appointed directly or indirectly by Whitehall.

At the moment it is virtually impossible to find out who sits on all the quangos in the country. Ministers said that a central list would be too expensive to compile. They have also, in what Labour alleges is 'ministerial sleight of hand', excluded thousands of unelected local quangos from the new regulations.

The oppostion asked ministers to widen their definition of 'Non-Departmental Public Bodies' to ensure that all the estimated 5,500 quangos in Britain abided by the rules.

David Hunt, the minister responsible for open government, has rejected the proposal. In a letter to Mr Kilfoyle, Robert Hughes, Mr Hunt's parliamentary secretary said the move would 'not serve any useful purpose'.

Quangos that remain outside the scope of the controls include: NHS trusts (which have often been alleged to be packed with Conservative supporters); further education colleges and grant-maintained schools (which have been removed from local authority control); training and enterprise councils (whose members were originally chosen by the Department of Employment); the regulators of privatised industries and housing associations.

Mr Hughes said he did not accept that there had been any concealment by these quangos which run large areas of local government.

Mr Kilfoyle said: 'It's patently ridiculous to pretend that NHS trusts are not quangos. The public has no say on who goes on them and often cannot find out what they are doing with their money.'