The Treasury must overhaul its approach to public spending

A new report for the Institute for Government has found that public spending is often wasteful, with the government failing to set out clear spending intentions and taking decisions without clear information.

The Treasury’s Responsibility for the Results of Public Spending, published on Tuesday, calls for a change in the role of the Treasury – in how it takes on responsibilities for the results of spending, and understands better the effects outside Whitehall. The Treasury needs to do more than simply set budgets – it needs to apply itself, consistently, to how money can be spent to achieve as much impact as possible.

The report finds that the government’s single departmental plans (SDPs), published annually since 2016, fall a long way short of what is needed, and its new Public Value Frameworks also have limitations.

The report calls on the Treasury to take on a more radical approach in three areas:

  • The Treasury should address intended performance with the same thoroughness as it does spending - with much stronger use of data and evidence.
  • The Treasury must set and enforce clearer standards for departmental performance and internal accountability, ensuring they have the leadership and staff data they need.
  • The Treasury must strengthen transparency and accountability, publish more information on spending and planned performance, and make sure this is accessible to the public or non-experts – including MPs.

Martin Wheatley, Institute for Government senior fellow, said:

“Brexit has wrecked the Treasury’s plans to run a serious spending review this year. It must consistently and seriously focus on how money can be spent to achieve as much impact as possible and at least cost. The recently announced Public Value Framework, while a step in the right direction, is nowhere near enough.”

ENDS

Notes to editors

  1. Full report can be found on our website.
  2. The Institute for Government is an independent think tank that works to make government more effective.
  3. For more information, including data to reproduce any charts, please contact press@instituteforgovernment.org.uk / 0785 031 3791.