Labour spend £167 billion a year on their expanding army of quangos

Labour was condemned last night over the expansion of costly, unaccountable quangos which are funded by taxpayers.

An in- depth study found the 883 "arm's-length" Government agencies and advisory and monitoring bodies, often staffed by box-ticking bureaucrats, spent £167.5billion last year.

That is up from £24.1billion in 1997-98 when Labour came to power - a seven-fold increase - and it is more than five times the Ministry of Defence's £32billion budget for this year.

There is mounting anger at quangos enjoying spiralling budgets at a time when Health Service trusts have been forced to sack staff due to funding shortfalls.

Figures exposing the huge increase in the power of "quangos" - public bodies such as British Waterways and the Learning and Skills Council - are sure to make uncomfortable reading for Gordon Brown.

In 1995, Mr Brown, then shadow chancellor, demanded "a bonfire of the quangos and greater democracy".

The Prime Minister has also laid himself open to charges of hypocrisy because Labour's 1997 manifesto criticised the Tories for allowing the number to soar.

The study by the Economic Research Council think-tank reveals that 200 more quangos have been set up in the past two years.

Seven more have been unveiled in the seven weeks since Mr Brown took power - including a Business Council for Britain, Homes Agency and Independent Statistics Board.

Dan Lewis, head of research at the Economic Research Council, said: "The problem with these organisations isn't just that they are expensive.

Scroll down for more

"They are secretive and unaccountable to the electorate."

John Redwood, head of the Conservatives' economic competitiveness review, said: "The rise of quangos under this Government has been astonishing.

"Many of these regulators just do not need to exist. How can it be right that our hospitals are now inspected by 94 different organisations and officials?"

Under Labour, the fastestgrowing quango has been the Milk Development Council, which aims to make milk-drinking more attractive to consumers and inform dairy farmers about technological improvements.

Best known for an advertising campaign featuring the model Nell McAndrew, boxer Amir Khan and boy band McFly the number of staff it employs has risen from five to 44 in the past decade - a rise of 780 per cent. The study also highlighted the massive pay rises awarded to the people running the agencies.

In one example, Dr Ken Boston, head of the Qualifications and Curriculum Authority, which oversees what is taught in schools, pocketed £273,000 in pay and benefits last year - a fortune compared with the £43,500 paid to his predecessor.

And it was revealed last week that David Gavaghan, the chief executive of the Strategic Investment Board, a Northern Ireland quango, received a salary of £213,000 - some £26,000 higher than the Prime Minister's. Critics accused the Government of creating quangos to give the impression it was taking decisive action to tackle any problem which arose.

For instance, the School Food Trust was set up in 2005 to "transform school food and food skills" in the wake of a parents' revolt over the poor quality of meals dished up to pupils.

Vince Cable, the Liberal Democrat deputy leader, said: "Some of these are enormously powerful bodies that dispose of vast quantities of money, are largely unaccountable and are often staffed with extremely highly paid executives, yet they produce results of questionable merit."

Matthew Elliott, chief executive of the TaxPayers' Alliance, said: "When the Government says we can't afford to abolish inheritance tax or cut council tax because it would threaten the number of teachers or doctors, they are clearly lying because there are so many quangos and non-jobs sucking money from taxpayers."

A Cabinet Office spokesman said: "Public bodies are only established where this is the most effective and efficient method of conducting government business."