The Sleazy State: How the Web of Patronage Works / Day 2: A quangocracy that bulges with Tories: Government appointees hold the power to control one-fifth of all public spending

IN 1979, Margaret Thatcher came to power vowing to wage war on a quangocracy stuffed with Labour supporters. Fifteen years and four Conservative terms later, the predictable complaint is that the non-departmental public bodies she pledged to decimate are thriving and bulging with Tories.

But current concern about quangos runs deeper than sniping over patronage, to fundamental doubts about the suitability of quasi-autonomous bodies as a major instrument of government.

According to the Cabinet Office, the number of quangos has dropped from 2167 to 1389 since 1979. More than 40,000 unelected government appointees now handle more than pounds 12bn of public money. But to these national quangos must be added the remodelled National Health Service - its pounds 38bn is distributed by appointees through district and regional health authorities and NHS trusts - and the new Training and Enterprise Councils which cost more than pounds 2bn a year.

Tens of thousands of appointees are now responsible for pounds 52bn, roughly one- fifth of government spending. The power and influence of the quangos and their unelected rulers will rise dramatically over the next few years as more public services move from democratic to government-appointee control.

The main complaints are that the new quangos are unaccountable and undemocratic and their appointees - many with political and financial links with the Conservative Party - are more ideologically driven than their predecessors.

Academics and opposition politicians warn of a 'democratic deficit' while John Stewart, professor of local government at Birmingham University, claims Britain is regressing to a 19th-century-style magistracy. 'The quangos are more secretive than local authorities,' Professor Stewart said. 'Their meetings are not public, there is less scrutiny of them by the press and there is also no political opposition. There are also problems with bringing business people into public service.'

Since the early 19th century, quangos have executed public functions at arm's length from ministers. According to Professor Alan Doig, author of Corruption and Misconduct in Contemporary British Politics, they mushroomed in the Sixties and Seventies during the push to make services more accessible and effective.

'There were large numbers of quangos in 1979 but they had limited powers and few of those who served on them had salaries,' Professor Doig said. 'They tended to be a dumping ground for retired trade unionists and MPs' wives. Then it was a question of who got their nose in the trough, not whether it should be a trough or not.'

By the latter part of the Eighties, a government initially wary of quangos had replaced the traditionally appointed old faithful with a new breed of thrusting young Thatcherites who directed quangos with evangelical zeal.

Professor Doig forecast disaster in 1988 when his research showed that many quangos had no recognised code of conduct which would promote a public service ethos. Their sponsoring government departments appeared to feel no responsibility for enforcing rules and guidelines produced by the Management and Personnel Office of the Civil Service in 1985.

Quangos are currently policed by the public-spending watchdog, the National Audit Office, and the parliamentary cross-party Public Accounts Committee.

But only 60 per cent of quangos are subject to NAO audit. In January, the Public Accounts Committee asked that the NAO be allowed to examine quangos and organisations which receive most of their income from the Government.

Lew Hughes, assistant auditor general, believes this may be the only way to ensure true accountability. 'We go beyond normal audit. Irregularities and waste in quangos, audited privately, are less likely to come to Parliament's attention.'

While William Waldegrave, minister for open government, staunchly defends quangos, others are considering changes. John Redwood, Secretary of State for Wales, is considering making the political allegiance of appointees public 'where appropriate'.

Last month Ian Lang, the Secretary of State for Scotland, admitted that new bodies, such as health trusts, school boards and local enterprise companies, might be changed. John Young, president of the Association of Scottish Conservative Councillors, says he is concerned about the 'imbalance' now operating. 'There are 1,682 councillors in Scotland. Under local government reorganisation that will fall to 1,200. There are now 5,000 quango appointees in Scotland and that is expected to reach 7,700 by 1996. Some appointees are receiving pounds 34,000 a year for a three-day week while the leader of Glasgow City Council receives pounds 7,000.'

The Government argues that the new quangos are accountable to the public through the Citizen's Charter and to Parliament, through their sponsoring secretary of state.

But Professor Stewart, like most critics, insists that power must return to local councils. National quangos might be accountable through a minister but monitoring the new army of local health, training and education quangos from a distant ministry would be impossible.

Leading article, page 21