The Conservatives’ pre-election promises about cutting the "costly bureaucracy" of quangos "created a false expectation that the review would deliver greater savings", the MPs have concluded.
If the Government wishes to make meaningful savings in public body expenditure it needs to examine not just how these organisations operate, but what they exist to do.
In many cases these functions should have been transferred to charities and mutuals, which would have helped the Government deliver its vision of a Big Society.
Bernard Jenkin MP, Chair of the Committee, said:
"The whole process was rushed and poorly handled and should have been thought through a lot more. This was a fantastic opportunity to help build the Big Society and save money at the same time, but it has been botched.
The Government needs to rethink which functions public bodies need to perform and consider transferring some of these functions over to mutuals and charities."
The inquiry found that the tests used to evaluate each public body "may have seemed superficially plausible at the outset, but they are hopelessly unclear". The Cabinet Office failed to establish a proper procedure for departments to follow and there was no system of consultation with the bodies concerned or with the public.
PASC also raises concerns that the Bill, as originally drafted, does not contain sufficient safeguards to prevent the misuse of powers by Ministers.
The review has highlighted the complex and confusing landscape of UK public bodies. The current system is chaotic, making it difficult to understand why different arms-length bodies exist and what these variations mean in practice.
The Committee is calling on the Government to re-examine the proper governance arrangements for each public body.
The Committee is also unconvinced that bringing functions back into central departments will create a more accountable system.
It says that the Government fails to recognise ways the organisations are held to account beyond ministerial accountability to Parliament. Stakeholders and civil society play an important role in providing challenge and criticism to public bodies on a day to day basis, a central part of the Government’s vision for a Big Society.
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