Nolan turns attention to quangos

STEPHEN GOODWIN

The possibility of public registers of the financial interests of members of local "quangos", including grant-maintained schools, is to be explored by the Nolan committee on standards in public life.

Lord Nolan yesterday formally announced his inquiry into local public spending bodies - a group of quangos which spend at least pounds 11m a year yet whose board members are neither elected nor appointed by ministers.

The study will focus on universities and further education bodies, grant- maintained schools, training and enterprise councils, and housing associations.

While dismissing suggestions of a "witch-hunt", Lord Nolan said some bodies in each category had been "the subject of some public concern".

"There have been comments on the fact that these are really self-perpetuating boards, that they handle a great deal of public money, that there is scope in some areas in particular for conflicts of interest and there have been unworthy suggestions of people feathering their own nest," he said.

Lord Nolan stressed that he did not want to discourage people from serving or to comment on individual instances of malpractice - though, as with his first report on the conduct of MPs and ministers, evidence on celebrated cases will inform his conclusions.

There are echoes of the most controversial aspect of the report on MPs in the suggestion that registers of interest, open to public inspection, could be a safeguard against conflicts of interest.

The Issues and Questions document, put out by the committee yesterday to stimulate responses, asks: "What should be declared? Should non-financial interests be included as well as financial, and the interests of close family as well as the board member's own?"

The committee will be looking at the openness, or otherwise, of local quangos and the role of boards in relation to officers and staff.

Most attention will probably be given to the appointment and accountability of board members.

According to the committee, the process of appointment appears to be conducted "on a rather informal basis" relying heavily on local networking by members, particularly the chair.

"Is there a danger that boards will recruit in their own image and become closed to new people and new ideas?" the committee asks. "Is there an increased risk of impropriety or insufficient scrutiny of standards?"

At the most local level, the governors of schools in England which have opted out of local government control were responsible for the spending pounds 1.6bn of public money last year. So far some 1,050 schools have become grant-maintained.

There is no mandatory requirement for a register of governors' interests and no requirement to hold meetings in public, though agendas and minutes must to open to inspection and parents must be invited to the annual general meeting.

Since it became known that the committee was interested in local quangos, more than 200 letters have been received on the subject.

A deadline of 31 October has been set for written responses, oral hearings are planned for mid-November and Lord Nolan hopes to publish the report before next Easter.

"We must ensure that the values and standards which are cornerstones of public life are not lost in the drive for improvements to services," Lord Nolan said.