New ministers need to know how their departments' budgets work

Next week a new cast of ministers will be appointed and dispatched across government. The new prime minister, whether it is Lis Truss, as widely expected, or Rishi Sunak, will have their own priorities and goals – and their chosen ministers will be asked to deliver them. The pressure is on. 

But as they arrive in their new departments one of the first things ministers will need to get to grips with is the consequences new policies have for existing plans – particularly in terms of how money is spent, who spends it, and how this will affect the public. Spending public money is at the heart of everything ministers do and understanding how to spend it as efficiently as possible should be a high priority for any new or aspiring minister. Becoming a minister, as our new paper sets out, means understanding how departmental budgets work.

The UK system doesn’t support ministers to learn how government works 

UK transitions see new ministers very rapidly absorbed into the government machine. Within minutes of their appointment their private office will get in touch, they’ll be swiftly brought into the department and their diaries will fill up. There will barely a pause to think. If the new minister is not in Westminster then their ‘box’ of papers to read and decisions to make will chase them down, wherever they are. It is a rapid learning curve, especially if the new minister has never served in government before. Even for cabinet ministers who have headed up other departments, going into a department they have never worked in before requires a speedy education on the brief.  

Within all of that, there are some very complicated aspects of government to learn about. The department’s budget, and how public finances work, is one of them. A new minister can get the basics quickly, particularly if they have served on a select committee or worked on any finance-related bills. But despite huge pushes in recent decades to improve uniformity in how government finances are dealt with across Whitehall, every department’s budget has very different characteristics – not least in how that money is spent, either by the department or by bodies far removed from central government.  

Ministers need to ask good questions about their department’s budget 

Ministers don’t need to know the minutiae of all of this. The purpose of the civil service is to be across the details and to make sure ministers have the information they need to make decisions. But ministers need to be able to challenge their department. They need to be able to ask intelligent questions and ask whether something can be done differently. They need to steer their department in terms of what the new political priorities are. And they are also the ones who will take on the political risk if they ask their department to do something that officials warn will lead to problems.  

They arrive with budgets already set. This means that departments have limited wiggle room, or rather if they do make changes to find money for new initiatives then it means stopping doing something else or asking for new money. There may well be things the department is doing that can be slowed, amended or stopped, but ministers need to go into such decisions clear-eyed about what the consequences will be.  

Ministers who are across their budget will do better in spending reviews  

The next prime minister may well hold an emergency budget, or similar fiscal event, but it will be the next spending review (promised by Liz Truss within months) that will determine what the department will do over the next year or two. These are political negotiations primarily. Departments undertake a huge amount of work (as do the bodies they oversee) to make their pitch. But in the end it is ministers who have seal the deal. Those who understand their budget, and have spent time early in their tenure working with the department on the existing budget and its strengths and weaknesses, will be best placed to argue their case. With huge pressures on public finances and massive demands on the services of government, that is only going to get harder.  

Change in policy is not only about policy design and delivery, it is also about paying for those changes and using the resources of the department well. And new ministers, particularly if they are inexperienced in government, will need to learn quickly how best to use their position to drive that change. The cost of living crisis only magnifies how important it is to get to grips with their department and how it works as quickly as possible