21 March 2019

The Treasury’s new-found commitment to getting value for money from taxpayers’ money is welcome – but it needs to be permanent, writes Martin Wheatley.

Is the Government getting maximum value out of every pound it spends on key public services? That question has been addressed in the Treasury’s new document on “Public Value”, which was published alongside the Spring Statement. Described as a “practical tool”, the document sets out the process of turning inputs into outputs across public services – in other words, making sure taxpayers’ money is not wasted.

It spells out how the Treasury will act on recommendations put forward by Sir Michael Barber, who previously ran the Prime Minister’s Delivery Unit from 2001–05. The Treasury, which commissioned Sir Michael in 2017, took some time to respond, and the IFG Spending Review report expressed concerns that any recommendations would “flourish too late for the 2019 Spending Review.” However, by setting out its intentions now and committing to “a renewed focus on the outcomes achieved for the money invested in public services”, the Treasury is clearly trying to put doubters’ minds at rest.

The Treasury has tried and tested the approach

The public value document recognises that delivering value for money involves more than just thinking clearly about aims and then managing spending plans. It requires constant dialogue with users and citizens, as well as working closely with those organisations – such as government departments, arm’s length bodies, businesses and the third sector – involved in running public services or building and maintaining infrastructure.

The Treasury has taken a sensible approach to putting Sir Michael’s recommendations into practice. Rather than rushing headlong into applying his proposals, it has instead collaborated with departments on selected programmes to see what works best. Having done so, it is now adopting a simpler approach: Sir Michael’s framework set out 152 questions to ensure money was being wisely spent, but the Treasury’s document whittles these down to 35.

The Public Value document could still be improved further

The Treasury’s proposed process suggests that crucial decisions will take place inside government departments, with frontline insight limited to “interviews and site visits.” But there is surely a stronger potential role for the people who have to make government policy work on the ground. The document is also silent on the role that departmental non-executive directors, the business leaders from outside government who sit on departmental boards, could play in the process. Nor does the document do enough to consider how public money can best be spent on cross-departmental projects such as tackling knife crime or homelessness.

The Treasury must demonstrate commitment to this new approach

Can these commendable intentions withstand the politically-driven “many-sided tug of war” that usually takes place in the build up to a spending review? The challenge of Brexit and the competing leadership ambitions of many secretaries of state only add to the usual pressure.

Ministers and officials, both in the Treasury and throughout the Government, must ensure that there is a credible, evidence-led, relationship between spending plans and spending results. The Chancellor has hinted that the era of austerity is coming to close, but the Government’s spending plans will remain tight – and every pound must achieve the best possible results. The Public Value document is a step in the right direction.