How Scotland's quangos have usurped democratic power under SNP

For a small country, Scotland requires an extraordinarily large number of people to administer it. This starts at the top with 29 ministers and works its way through a labyrinth of special advisers, civil servants and, of course, 132 quangos.

One does not have to be a disciple of Elon Musk to discern waste and duplication. There even appears to be potential for political consensus. The SNP’s public finance minister, Ivan McKee, admits there are £5 billion “back-office savings” to be made. Within a budget of £60bn, that’s a pretty big “back office” and the last people likely to fix it are those under whom it developed.

Labour this week produced an analysis of the Scottish Government’s “quango addiction” and Anas Sarwar declared: “A Scottish Labour government will end the SNP's quango culture… so that public money goes where it is really needed.” Few would disagree with that objective.

Nicola Sturgeon at the launch of the Scottish National Investment Bank in November 2020 (Picture: Andy Buchanan/WPA pool) | Getty Images

Mediocre government

However, it would be a mistake to focus solely on cost. The bigger scandal of quango dependency is the contribution it makes to mediocre government and avoidance of accountability, which are the hallmarks of Holyrood.

Take the example of the Scottish National Investment Bank, the necessity for which has never been clear – apart from having an organisation with “Scottish National” in its title. It has already accumulated 100 employees and been handed another £200 million in the coming year, while pre-existing development agencies see their budgets slashed.

The SNIB is best known for losing £8m on the Scottish Government’s deposit return scheme, presumably under political instructions since no banker in his or her right mind would have touched it with a recycled barge pole. However, another of their investments illustrates the implications of separating highly political decisions from accountability.

Early in its life, the SNIB entered a relationship with an outfit based in the Cayman Islands called Gresham House which, through a network of subsidiaries, buys land to plant trees and harvest carbon credits. In this way, Gresham House has become Scotland’s third biggest landowner while inflating land values.

I am deeply sceptical about dubious environmental benefits being turned into a speculative opportunity or why public money should promote this. Yet neither the objectives nor mechanism for incentivising Gresham House’s emergence in Scottish society has ever been debated on the floor of Holyrood.

It is just a fait accompli, backed by SNIB’s £50m of our money – the antithesis of the lip-service paid to land reform. In the same way, huge areas of public policy are effectively outsourced to quangos with minimal parliamentary scrutiny or accountability. And that is how accidents – think ferries, think highly protected marine areas, etc, etc – continue to happen.

Scotland’s quiet quangoteers

Another huge democratic deficit in Scotland’s quango network is an appointments system which keeps producing the same people, dictated by the essential qualification that they will not cause any difficulty to the ministers or civil servants on whose patronage they are repeatedly reliant for the next job.

A cadre of appointees has developed, who flit from one chair to the next or occupy several at the same time. Either Scotland is a land singularly bereft of talent – which I do not believe – or else the public appointments system is hopelessly corrupted by this determination to exclude anyone who might cause difficulty to the government which appoints them.

If you study the network of appointments in which the same individuals criss-cross from one quango to the next, the lesson is that nothing succeeds like failure, just so long as their faces fit, their silence is guaranteed and they remain available for selection.

These priorities deprive the quango system of its only real justification – which should be to offer alternative sources of independent advice to ministers on the basis of expertise and experience. That used to be the case but simply cannot happen when the system depends on quango tourists, to whom their temporary destination is unimportant. Any old quango will do.

Take one recent example. A veteran of that circuit, Mike Cantlay, has just ceased to be chair of the Scottish Funding Council, for higher and further education. This quango polymath had previously been round Scottish Natural Heritage, Visit Scotland, Highland and Islands Airports, and heaven knows what else, without trace.

It is hardly a state secret that higher education funding is on a shaky nail while the further education sector has been steadily impoverished. The Scottish Funding Council’s duty over the past few years should have been to send out strong warnings to the Scottish Government – preferably from a leader respected in educational circles – about the pitfalls ahead. Instead? Silence.

The ”interim co-chair” to succeed him is Lorna Jack who already chairs Highlands and Islands Airport Ltd (a quango board which, of course, includes no member appointed by ministers who actually lives in the Highlands and Islands). Airports, education… who cares? We await to see if Ms Jack will be more vocal about the state of education funding than her predecessor.

Not the sexiest political issue

Of course there should be a cull of the quangos, but not just as a money-saving exercise. Where possible, powers and resources taken away from local authorities should be returned to democratic accountability.

Where public bodies make sense, they should be valued for their independence, rather than obsequiousness. The people who head them should be respected figures in their field. The current appointments system should be binned on day one.

Transforming Scotland’s governance may not sound like the sexiest political subject. However, it would be foolish to under-estimate the extent to which people despair not just of outcomes but of the processes that lead to them, or how devolution has become a front for decision-making that has grown more remote from people and communities affected.

A root-and-branch review of how all that can be reversed would be a manifesto commitment with resonance – and Scotland’s quangocracy is a good place to start.