Leading Article: A warning from Wessex

AN INVESTIGATION by this newspaper and Computer Weekly has concluded, as we reported yesterday, that mismanagement within Wessex regional health authority has led to millions of pounds of public money being lost on computer contracts. These losses could total as much as pounds 63m. The authority's chairman, Sir Robin Buchanan, is alleged to have intervened in negotiations for contracts committing the authority to pay for services it did not need, and allowed conflicts of interest with a private sector contractor.

Regional health authority chairmen (and women) are appointed by the Secretary of State at the Department of Health. The present incumbent, Virginia Bottomley, is understood to have been briefed about Sir Robin's role, recognises that mistakes have been made, but believes that no further action is needed.

Given the spectacular sums involved, that seems a complacent reaction. The story might almost be a parable of what happens when more and more decisions about public spending are taken by unelected quangos that are headed by government appointees and unaccountable to the people they serve. It was these same quasi-autonomous non- governmental bodies of which Margaret Thatcher promised to make a bonfire in 1979. Under the last Labour government, their number had risen to about 2,400, employing 1.2 million people and spending about pounds 14bn of public money - often, the Conservatives believed, counter-productively.

Several hundred were culled. But new ones sprang up as one function after another was removed from local government. At the last count in 1991, quango spending had tripled to pounds 41bn, and with it the importance of patronage. Just as Labour governments appointed former MPs and trade unionists to run them, so the Conservatives favoured kindred souls, with a growing preference for businessmen and industrialists rather than members of the 'great and good'.

The jobs concerned, though often relatively well-rewarded, are far from sinecures. Many businessmen find the political content uncomfortably high: the scrutiny of a board of directors may, in retrospect, seem preferable to the continuous attentions of the local press. Whether the post involves running a regional health authority, or one of the new post-privatisation regulatory bodies (Oftel and the like), a new range of skills is required, combining the qualities of an organisationally skilled managing director and an entrepreneurially inclined civil servant.

In France, such an elite is forged by the grandes ecoles, whose graduates move between upper echelons of the civil service, business and regional government. Perhaps one or two superfluous business schools in this country should seek to plug the gap.

There is a more serious danger than that posed by a shortage of well-qualified chairmen. It is that the accelerating trend to government by patronage and quango will increase the disenchantment of the governed with the political process itself.

Japan and Italy show what happens in political terms when a single party dominates for too long. Patronage breeds corruption. Corruption breeds disillusion. For all this country's faults, we are not there yet. But the saga of the Wessex regional health authority is another warning sign.