'Bonfire of the quangos' costs rise

Ministers have underestimated the cost of implementing their "bonfire of the quangos", the Whitehall spending watchdog has warned.

The Government said it would save £2.6bn by 2014-15 by axing 262 public bodies. But the National Audit Office said the transition costs would be at least £830m – almost double the £425m ministers estimated when they launched the plan in October 2010. As a result, the Government will now have to find total savings of £3.5bn if they are to meet the 2014-15 target. The NAO said there was still "insufficient grasp" of the continuing costs of the functions which were being transferred from quangos to other parts of government.