The cost of shutting QUANGOs

I wrote a blog post entitled, poorly, Quangos begin to burn. Part of what I said about the scrapping of these QUANGOs is that there would be huge cost involved.

You’ll hopefully remember Francis Maude saying he couldn’t say how much money the coalition would save from shutting down the 192 organisations. Which is hardly surprising really. It’s hard to calculate the costs of redundancies, shutting down properties, terminating contracts and so on. So the likely savings from such an exercise are a long way down the line.

Today, we discover that the closure of just nine of the QUANGOs are going to cost upwards of £1.4 billion. the Regional Development Agencies, abolished in the spending review, will continue to cost the Government money over the next four years. It is impossible to immediately stop the work of the RDAs and they are to be wound down over the next few years with large redundancy costs for staffing.

  The BIS alone will pay £435 million over four years to meet current legal commitments, and complete projects already under way. This will be approximately 30% of the costs of closing the nine bodies.

The largest contribution towards RDA costs has traditionally come from the Department of Communities and Local Government, and that’s likely to be the case. The rest of the funds will come from Environment, Energy, and Transport.

Although some QUANGOs will be smaller than others, the huge cost involved in these nine organisations show us just how expensive closing down 192 in total is likely to be for the Government and the taxpayer.


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