Savings from quango bonfire 'exaggerated'

The Government's claim to have saved billions of pounds for the taxpayer from its "bonfire of the quangos" is likely to have been exaggerated and should be reassessed, an influential committee of MPs concludes today.

Francis Maude, the Cabinet Office minister, claimed last year that moves to abolish 262 government agencies would lead to £2.6bn of "administration savings". But in a critical report the Public Accounts Committee has taken issue with Mr Maude's assessment and questioned whether they were "genuine" savings.

It suggested the figure might include cuts in services, rather than genuine savings resulting from administrative reorganisations, and said not enough account had been taken of the additional costs to other parts of government of taking on functions previously carried out by abolished bodies. The report comes a day after the Treasury announced that government departments would have to identify around £16bn more savings.