The Government says it will not put up with the Equality and Human Rights Commission (EHRC) continuing to misspend taxpayers’ money.
Home Secretary Theresa May says the EHRC has a “track record” of misusing money and that further problems will not be “tolerated”.
The EHRC has had its budget cut and staff numbers are set to be reduced, but reports suggest the quango will not be dismantled altogether.
Mrs May’s comments come as the EHRC failed in recent days to have its accounts approved by the National Audit Office (NAO).
The NAO noted the equality group’s “irregular expenditure in a number of areas”.
It said the EHRC had made improvements but that some of the failures identified were “deep seated and longstanding”.
Mrs May, who strongly criticised the EHRC while in opposition, said: “The EHRC has a track record of not being careful enough with taxpayers’ money, and these accounts show that problems there persist.
“Failure to deliver will not be tolerated by this Government – we will look at further sanctions if the problems highlighted by the auditors are not dealt with.”
She added: “The Government is totally committed to creating a more equal society for everyone, but we’re also committed to cracking down on waste and failure.”
The Guardian newspaper reports that the EHRC is undergoing “radical restructuring”.
Staff levels are set to be reduced to a maximum of 400, according to a source.
The Government has said it intends to cut all Government spending by £6.2 billion, £600m of which will come from reducing quangos’ budgets. The EHRC budget has been cut by £7m to £53m.
Other quangos, including an agency that promoted the use of technology in schools, have been completely ditched.
In February the Equality and Human Rights Commission claimed that making girls wear school skirts as part of their school uniform was “potentially unlawful”.
The group said such dress codes may discriminate against female pupils who have gender dysphoria and believe themselves to be boys.
Responding to the EHRC claim, one columnist said it showed the ‘loony Left’ policies of the 1980s had been embedded in the group.
Leo McKinstry wrote: “Such an edict would be laughable were it not so indicative of the disturbing mindset of the equality bureaucrats who wield such control over our lives.”