Government wields axe on nearly 200 quangos and plans to merge many others

ALMOST 200 quangos face the axe as part of government proposals to save millions of pounds while a further 481 face reform, the Cabinet office revealed yesterday.

The closures will lead to thousands of job losses and are likely to create a substantial redundancy bill for the government, although it claimed yesterday in the long run more money would be saved than the redundancies would cost.

Cabinet office minister Francis Maude said the government would introduce a Public Bodies bill next month that would see 192 quangos cease to exist with their functions brought back into government. A further 118 public bodies are to be merged down to 57 while 171 face “substantial reform.” The total will be cut from 901 to 648, with the future of 40 bodies still under consideration.

The government refused to put a figure on the estimated job losses or potential savings that closing the quangos would result in.

Many of the casualties were already expected. Among them were the Office of Fair Trading (OFT) and the Competition Commission, which the government intends to merge into a single competition and market authority early next year.

Regional development agencies will also be scrapped with the work they do transferred to local government.

Meanwhile, Ofcom is to take over the responsibilities of the Post Office regulator Postcomm, and the Gambling Commission and National Lottery Commission are to be merged. And the Olympic Park Legacy Company, responsible for developing the Olympic site after the 2012 games is to see its powers transferred to the Mayor of London.

Maude said: "In many cases, today’s proposals will ensure we preserve the quality of vital services, while allowing them to become more efficient and giving more power to the front line professionals who know those services best."

He added that in recent years there had “been a great tendency for the government just to set up new bodies, so-called arm's length bodies, often just to avoid ministers having to make difficult decisions and defend them."

Liam Byrne Labour shadow cabinet office spokesman, attacked the proposals saying the cost of closing the quangos would be greater than the savings made.