Issue 8: January 2014

WORTH MORE THAN THE FIRST MINISTER? SENIOR SALARIES IN SCOTTISH QUANGOS

By Alison Payne, Research Director, Reform Scotland

In December last year, Reform Scotland published a bulletin highlighting the salaries of the Chief Executives of Scotland’s quangos.

The research, which was all taken from the Scottish Government’s National Public Bodies Directory, showed that of the 58 Chief Executive salaries we highlighted:

•    19 earned as much as or more than the First Minister
•    39 earned as much as or more than a Cabinet Secretary
•    48 earned as much as or more than a Government Minister

It was also apparent that the Chief Executive of Scottish Enterprise earned double the salary of the Cabinet Secretary for Finance, despite the fact that many people would consider that the latter is the former’s boss.

Similarly, the Chief Executive of every health body earned as much as or more than the Cabinet Secretary for Health and Wellbeing.

The purpose of our bulletin was not to disagree with the level of salary some individuals are paid, or even to start a debate about whether anyone within the public sector should be earning more than the person running the country – the First Minister.  The reason we published this research was to draw attention to the use of quangos in Scotland and to highlight their lack of proper accountability. 

We believe that Scotland needs to end its love affair with quangos and build democratic accountability through transparency

A quango is an organisation that has responsibility for developing, managing and delivering public policy objectives at ‘arm’s length’ from government. Such bodies assist in the delivery of public services in Scotland including culture, healthcare, the environment and justice. They have a long history of operation in the UK and have become an established part of public sector delivery. In particular, quangos carry out statutory, regulatory and advisory functions and are managed by a Board whose members are directly appointed by Government Ministers.  Total funding for quangos now amounts to almost £12bn, approximately one third of the entire Scottish Government budget. 

The problem with quangos is that they are neither fully democratically accountable nor fully independent of government, so using arm’s length bodies to carry out key activities can lead to a lack of transparency and accountability. A democracy should have an established and clear chain of accountability to the electorate. Civil servants tend to work in a government department headed by a minister who is accountable to the Scottish Parliament between elections and to the public at elections. Therefore, there is a clear line of accountability between public sector action and the electorate. Equally, independent organisations which enter into contractual relationships with government to deliver certain services also offer greater clarity and transparency in the delivery of government objectives. However, the growth of quangos has distorted accountability because such organisations have less direct ministerial involvement. This also allows government to hive off difficult decisions to non-government bodies and so reduce the political consequences.

The current lack of openness and accountability is not conducive to good governance. This needs to change because the power exercised by government in our democracy derives from the consent of the people and should be exercised in their interests. It is difficult for people to judge whether that is the case when the current way in which government carries out its functions blurs accountability.

Whilst there have been efforts made by the Scottish Government to cut the number of quangos, they have failed because they have been piecemeal and focussed on the wrong target.  They have looked at the functions of the different bodies and tried to simplify or merge them to reduce waste and bureaucracy.  This ignores the real problem.  It is not what quangos do, but the way that they do it that is the fundamental problem. 

We believe that Scotland needs to end its love affair with quangos and build democratic accountability through transparency.  This would introduce greater clarity and openness into the political process in Scotland and make those who are spending taxpayers’ money more accountable to the people.

Reform Scotland is not necessarily arguing that the functions carried by quangos should not continue, nor that the money should not be spent, but rather it must be done in a way that offers transparency and democratic accountability.

The problem with quangos is that they are neither fully democratically accountable nor fully independent of government

We think that a much clearer distinction between what is a function of government and what is done by organisations that are independent of government is needed. To achieve this, in those areas where government does act, it must be clearly and directly accountable to the public for its actions. Therefore, it follows that we should move towards a system in these areas in which government acts directly through civil servants in its own departments wherever possible. There should also be a presumption in favour of functions being performed by local authorities, where appropriate, to ensure accountability to local communities. Where it is felt that functions would be performed better by an independent body or bodies, government would enter into an open and transparent contractual agreement, against agreed outcome measurements.   This would enable genuinely independent organisations to perform that role while government provides them with any necessary funding. This would require an examination of existing non-departmental public bodies to decide whether their functions should be brought in-house or whether they should be turned into independent bodies.

For example, the functions of Scottish Enterprise, Highlands and Islands Enterprise, VisitScotland and the Scottish Environment Protection Agency could largely be brought back into government, or devolved to councils so that ministers or local authorities are more directly accountable for these areas of policy. Any residual technical or advisory functions which required greater independence of action could be performed by independent bodies.

Equally, there are a number of current non-departmental public bodies such as the Scottish Law Commission, Royal Botanic Garden and National Museums of Scotland which could be made independent of government, contracting with the government to provide certain services or achieve particular government priorities. Such bodies would be free to negotiate their own financial settlements with the Scottish Government in the future.

The one exception to this change should be tribunals, such as the Children’s Panel, which are judicial bodies separate from both the formal court system and the Scottish Government.

We believe that our recommendation would introduce greater clarity, openness and transparency into the political process in Scotland and make public spending more accountable to the Scottish electorate.

Alison Payne is the Research Director of Reform Scotland

By Alison Payne, Research Director, Reform Scotland

Issue 8: January 2014

Issue 8: January 2014

SMART CITIES: SMART SERVICES: SMART WORKING

Smart Cities: Smart Services: Smart Working Editorial

In focusing on 'Smart Cities' let's start with a few teaser questions (answers at the foot of this column)...

PREVIOUS ISSUES

Looking for a previous issue? Use the menu below to select an issue.