MPs are right to call for stronger parliamentary scrutiny of government spending plans

A new report by the Commons Procedure Committee is critical of Parliament’s role in the public spending process, and has proposed a powerful new Budget Committee to drive improvement. This is an idea which should be given proper consideration. If the Treasury is serious about getting value out of public spending, then it should drop its sceptical stance about the case for better parliamentary scrutiny.

Public spending ('supply') is central to the Commons’ role. MPs struggled over centuries to establish that the monarch could only spend money with Parliament’s say-so, and Parliament continues to demand greater scrutiny of government spending. On 27 February this year, for example, the House passed a bill authorising nearly £350 billion of spending without debate at second or third reading. “Blink and you miss it… I think that is inexcusable and needs to change”, said MP Charlie Elphicke in evidence to the Procedure Committee.

Even the committees which scrutinise government departments give very little time to scrutiny of spending. In our evidence to this inquiry, we found that none of the five committees overseeing the largest-spending government departments had taken oral evidence on the Estimates – the financial plans which the Government presents to Parliament for formal approval – during the 2018–19 Estimates cycle, and only two had exchanged correspondence with their department.

Better scrutiny would help the Government get better value out of public spending

The Treasury says it wants to increase its focus on the results achieved by public spending. In other words, to move beyond divvying up money between departments and instead make sure that spending allocations achieve results.

In part this can be achieved by the Treasury adapting and improving its own practices. As Chief Secretary Liz Truss has argued, “the 2019 Spending Review will have a renewed focus on the outcomes achieved for the money invested in public services.” The recently introduced Public Value Framework, better departmental plans and stronger professional finance skills are all part of this drive – and there have been some limited signs of improvement.

However, as the Department for International Development Permanent Secretary Matthew Rycroft argued at an IfG event, strong external scrutiny can also play a part in encouraging organisations to take impact and value seriously. The Procedure Committee makes the same point, stating: “A Budget Committee would be a natural ally of the Treasury in its mission to ensure that public money was well spent and accounted for.”  

Criticisms of a Budget Committee don’t stack up

While proposals for a Budget Committee, or something similar, have been around since at least 2011 – when the MPs Sir Edward Leigh and Dr John Pugh wrote a report for then Chancellor George Osborne – they have struggled to gain traction. This has been due to a mixture of scepticism – driven by concerns about the cost and potential confusion of additional committee activity and the need for professional resources to provide support – and doubts over whether MPs could ever get sufficiently excited to give the system real political energy.

However, the cost of extra parliamentary experts could be paid for many times over if there was even an incremental improvement in the results achieved from billions of pounds of government spending. In our view, the committee makes a strong case that none of the current Commons committees are able to give the Government’s plans the attention they deserve, while the serious interest of the Procedure Committee’s members, and other MPs like Charlie Elphicke, Angela Eagle and Richard Bacon, show there is political interest in a new approach.

The UK is falling behind when it comes to scrutiny of public spending

As the Organisation for Economic Co-operation and Development (OECD) pointed out in written evidence to the Procedure Committee, the UK is relatively weak on budgetary scrutiny when compared to other OECD countries – including those countries with Westminster-style constitutional settlements. Ireland, for example, has recently overhauled its spending scrutiny arrangements to set up a new Budgetary Oversight Committee of the Dáil, supported by a statutorily-established Parliamentary Budget Office.

This report is both timely and necessary. It should be taken seriously by both Parliament and the Treasury.