Greater budget scrutiny means better outcomes for citizens


by Alan Bermingham, Policy and Technical Manager, Central and Devolved Government, CIPFA.

It has been accepted by many that better co-ordination and collaboration across government, focused on outcomes, could lead to better results for citizens. However, it has been recognised that in Westminster there has been a perceived lack of political direction to enable public bodies to make a comprehensive step towards outcomes based planning across government – but quietly, there may be a change in the wind, coming in the form of greater scrutiny of departmental plans.

The Procedures Committee of the House of Commons has recently conducted an enquiry into the establishment of a Budget Committee, following on from a 2011 report by Edward Leigh MP and Dr John Pugh MP to the then Chancellor on options to improve scrutiny of government expenditure. It was in this report that the establishment of a Commons Budget Committee was first raised as a key recommendation.

Given departments plans are overseen by both the Public Accounts Committee (PAC), which considers the economy, efficiency and effectiveness of government spending, and the Treasury Select Committee, which scrutinises overall fiscal policy and spending plans, you would be right to question what yet another committee could add. However the report’s authors suggest a number of ways a Commons Budget Committee could strengthen current processes, including:

  • providing scrutiny of estimates between presentation and royal assent 
  • taking evidence about the capability and capacity of spending departments and their arms-length bodies
  • considering the budget figures for forthcoming years
  • devising departmental select committees on areas that merit further examination, and 
  • reporting to parliament generally on the feasibility of government’s plans.

The proposed committee would allow for greater proactive scrutiny of government spending over the medium to longer-term horizon. This could go further to include a co-ordinating role to ensure levels of duplication or overlap are reduced, and that departmental plans are linking together to support better outcomes from spending. Arguably the budget committee could start to lift the level of transparency over the current horse trading arrangements, and allow more opaque elements of the way public money is currently being allocated. 

In our 2018 budget representation to HM Treasury, CIPFA called for greater encouragement for select committees to engage in the process and undertake scrutiny of spending proposals, with an emphasis on understanding the impact of spending decisions. 

It is important and essential that we understand what our spending decisions have achieved in order to address fiscal constraints amid the impact of increasing demand for public services. The proposed budget committee could underpin an outcomes based approach by providing greater direct, and proactive scrutiny – different to the more retrospective approach to scrutiny provided currently by the likes of the PAC and departmental select committees. 

If it was well established, CIPFA can see a budget committee with the appropriate standing, remit and membership could go a long way to unleashing the cross collaborative thinking that is needed to drive resources away from departmental silos, and towards longer-term outcomes and sustainable services. 

While this is not likely to be addressed in the forthcoming Spending Review, such enquiries into greater scrutiny arrangements are vital to support the way budgets and planning in government must evolve to provide better outcomes and longer-term value for money. 

This article first appeared in Public Finance.

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