The Treasury has called for a crackdown on quangos, which are costing taxpayers billions each year. Analysis by The Times of 33 quangos shows that direct government spending on them jumped by more than £1 billion, from £16.1 billion to £17.2 billion, between 2006-07 and 2007-08.

The survey also shows that more than 100 board members or executives were paid at least £100,000 last year, with five earning more than £300,000. Despite government claims that the number of quangos is falling, at least 40 new bodies have been created since Gordon Brown took over as Prime Minister in June 2007. The Treasury has admitted that 160 of the biggest quangos, set up at arm’s length from Whitehall departments, cost the taxpayer £34 billion last year. Spending increases on these unelected bodies has far outstripped those on Whitehall departments — up 3 per cent last year — and main political parties are turning their focus on quangos as they search for big cuts in public spending.

Liam Byrne, the Chief Secretary to the Treasury, has written to Whitehall departments demanding an urgent review of all quangos to assess which can be abolished, merged with other bodies or taken back directly into their ministries. A number of quangos appear to have overlapping remits, including some covering skills, law and order, environment and transport. “The Ministry of Justice alone has 200 quangos,” said a Treasury spokesman.

Those likely to be scrutinised first include some of the biggest bodies, such as the Higher Education Funding Council for England, the Environment Agency and the Health and Safety Executive. The outcome, aimed at shaving billions from total spending on quangos of about £64 billion, will feed into the next public spending review, although interim results are expected in the Pre-Budget Report this autumn.

David Cameron is also expected to announce his own “bonfire of the quangos” in a speech on Monday.

“Taxpayers need to be sure they are getting value for money,” said a Conservative spokesman. “David Cameron has made it clear that he thinks there are too many of these non-accountable organisations.”

Ben Farrugia, policy analyst at the TaxPayers’ Alliance, said: “Spending on quangos has continued to rise despite promises to scale it back. Executive salaries and pensions have ballooned, while proper oversight of these bodies has been forgotten. With public finances so tight, every quango must be made to justify its existence.”

The alliance and the Economic Research Council both argue that the Government has little idea of the amount that it spends on these bodies. Although the Cabinet Office compiles an annual report nearly 18 months out of date, this captures only the 790 non-departmental spending bodies, which are entirely funded by the Government and are effectively doing work outsourced from Whitehall.

More worrying are the growing band of bodies partly funded directly by government departments, partly by the European Union and partly from charging for services. The TaxPayers’ Alliance estimated that in 2006-07 there were more than a thousand quangos and agencies, which cost the taxpayer more than £64 billion.

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