Boom time for Britain's Big Brothers

More than 20,000 officials are employed to keep an eye on other officials, and the number, under New Labour, is increasing, reports David Walker

BIG BROTHER is no longer just watching you: he's being watched himself. The public sector is undergoing a regulation boom, with more than 20,000 officials being employed to check the paper work of ... other officials.

According to the authors of a new study the Government employs more regulators, inspectors and auditors of its own procedures than before - yet the public sector has shrunk. Although the expansion took place when Margaret Thatcher and John Major were in power, it shows no signs of abating under New Labour. The Blair administration's plans for Scotland and Wales, plus its policies for health and education, are adding to theregulatory army.

The endeavours of 130-odd government agencies for inspection and audit inside government cost some pounds 1.5bn a year. Then there is the cost of staffing the regulatory bodies monitoring the private sector such as the Office of Water Services or the Office of Electricity Regulation, and local authority weights and measures and planning departments.

Some are inspectors - for example HM Inspectorate of Probation or the Social Services Inspectorate. Others are auditors - the National Audit Office employs some 800 staff to monitor Whitehall's books, in addition to the accountants and analysts employed by the Audit Commission (which also makes extensive use of consultants and private sector auditors) and, in Scotland, the Commission for Local Authority Accounts. Other regulators are gathered in a variety of "agencies" and "units". Bodies such as the Higher Education Funding Councils also do regulatory work.

The arms for Sierra Leone affair was a reminder, too, that Customs and Excise also employs staff whose job is to monitor fellow civil servants.

Professor Christopher Hood of the London School of Economics, lead author of a two-year study carried out for the Economic and Social Research Council, said last week that the work of these various regulatory bodies may well be necessary. The point is that no one knows. "There is no central monitoring of the monitors. Nobody inspects the inspectors to make sure they are giving the public value for money."

His study offers the first reputable picture of the "regulatory state". Since the mid-1970s the number of auditing and inspecting bodies has grown by a fifth, from 110 to 134 but at the same time staff numbers have grown as well, possibly by around 60 per cent.

Set against total public sector manpower of around four million, 20,000 internal regulators may appear modest - one inspector/auditor for every 200 staff - but Professor Hood says his estimates are minimal. A full tally of the regulatory operation ought to include 70 odd administrative tribunals and supra-national regulators such as the European Commission.

In addition, there is a cost to every government department and council of complying with rules and regulations set down from on high. The cost to universities, for example, of complying with the complicated documents issued as part of the regular Research Assessment Exercise has been estimated at more than pounds 27m - money which otherwise might have been spent on teaching or scholarship.

A further problem is overlap. Staff at one Yorkshire college of further education welcomed no fewer than 16 different auditors. The National Audit Office and the Audit Commission are reviewing the impact of regulation in education, including the finding that examination results in some schools appear to decline after visits from inspectors sent by Ofsted.

On the Government's behalf industrialist Sir Christopher Haskins, chairman of the Better Regulation Task Force, promised to alleviate the burden of regulation on citizens and companies. But this new study suggests he ought to turn his attention to government itself.

"The regulators of government do not meet one another, do not see themselves as engaged in similar operations and there are no mechanisms for encouraging consistency across the organisations involved," says Professor Hood. "Indeed the structure seems to reflect a belief that duplication, overlap and unrationalised proliferation, making costly demands, promote value for money."

He suggests more "league table" comparisons between the inspectors and auditors. "Given that the growth of regulation inside government looks set to continue under New Labour some coherent principles for regulating the regulators merit attention."