It's time to get spending reviews out into the open

Written by Andrew Greenway on 14 March 2017 in Opinion
Opinion

The latest round of efficiency savings demanded by the Treasury will set civil servants off on a merry dance. Given the official hours devoted to such reviews, is it time for rethink?

HM Treasury - Image by Stefan Rousseau/PA Wire

Well, here we go again.

As the chancellor announces another not-quite-a-spending-review to cut a further £3.5bn off departments by 2020, it’s time for another turn around the Treasury carousel.


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My first civil service job was in a team charged with handling a department’s spending review strategy. Preparation started many months out from the main event (a textbook example of Parkinson’s Law that work expands so as to fill the time available for its completion). Top trump cards stuffed with stats on various policy initiatives were produced. Numbers were calculated and carefully hidden from prying eyes. Speculative policy wheezes were cooked up. Bleeding stumps – Whitehall’s charming term for truly un-cuttable programmes – were undressed and artfully arranged.

During this process, the department’s senior leadership was convened on several occasions to kick the can down the road. Hundreds of civil servants contributed thick wedges of analysis and argument. Volumes of submissions were sent up to ministers. At the conclusion of six months’ work, the secretary of state and chief Secretary to the Treasury met. After 30 minutes of fruitless discussion, they dismissed their officials, ignored their exhaustively prepared briefs, and thrashed it out in a quarter of an hour. The final outcome was, well, pretty much what the department had to spend before. Nobody agreed with the outcome, but neither did anybody disagree in any respect.

I mention all this because I feel deeply sorry for all the civil servants dancing this merry dance now. I was terrible at my spending review job. Being young and dismayingly stupid, I felt at sea in a game where the rules made no sense and the best outcome was apparently a draw. Now I’m older –  if not necessarily wiser –  the rules are clearer. But I still can’t fathom why you would want to play the game in the first place. More to the point, I can’t understand how it benefits anybody outside the Whitehall bubble.

Internally, there’s a logic to the madness. Spending reviews are a version of civil service finishing school. In order to maintain one’s mental health as an official, you have to be able to reconcile seeing your Herculean personal efforts filtered away to the purest innocuousness. As far as the outside world is concerned, you may as well have spent the time knitting and eating cheesy snacks. The spending review process, I would suggest, is the apotheosis of bureaucratic self-denial.

There is also something about the business of spending reviews that conceals the civil service’s weaknesses behind genuine strengths. It is no coincidence that those who succeed in spending reviews – revel in them, even  – are often those destined for the headiest heights of the civil service. But it does tend to draw the same problems back to the surface time and again. Peter Hennessy’s magisterial book on Whitehall observed 28 years ago that while senior officials were unparalleled in judicial wrangling and negotiation, their financial management and technological awareness was dreadful. The comment remains mostly fair.

Institutionally, everything about civil service budgetary negotiations slots in to the bureaucracy’s deepest grooves. The pettifogging tedium of government accounting, the congenital snag hunting from both sides of the negotiating table. It’s not about money. It’s about the love of the game.

I wonder if anybody in the Treasury has gone to the trouble of costing up a typical spending review. The official hours devoted to these exercises alone must set the country back millions. But ­– and it’s quite difficult to ask this rhetorical question without including a swear word – what’s the point of it all?

The deadening effect of devoting so much official time to the game seems especially indefensible in the current cycle. Theresa May’s government has screwed the lid down on many of the largest spending buckets anyway. This time around, the NHS will remain untouched. So will schools funding. So will the 2% military to NATO. So will the 0.7% foreign aid commitment. At this rate, the only state outlay within the scope of future spending reviews will be the size of security detail assigned to Jeremy Hunt and the foreign secretary’s travel expenses.

The official line is that budgetary rituals force governments and departments to confront hard choices. Such conversations bring rigour to bear on the taxpayer’s investments. Mercurial ministers are checked by bureaucratic balance. These are good reasons. But why must it all take a wholly disproportionate amount of elbow grease and heartache? Why must it require so much paper? The civil service is there to support the government of the day, not run a magazine.

We should bring rigour to bear on public spending, there’s no doubt about that. But there’s no particular reason that civil servants – Treasury officials or otherwise – should have a virtual monopoly on fulfilling that role. A few organisations do their best to supplement them. The Institute for Fiscal Studies and Institute for Government make a decent fist of it, so does the OBR. But they are as in the dark about the arguments leading up to the final decisions as anybody else. This does not feel healthy.

So here’s a bad idea. For the next major spending review, why not have departments blog their spending bids to the Treasury in real time? The Treasury can then publish a response, and a conversation begins. The game would be refereed by an independent adjudicator – someone like FullFact, for example, rather than a media outlet – to make sure arguments from both sides hold water. Observers could pitch in evidence, if they so wished. Ministers would still get the final say, of course, and it would be their prerogative to do the final deals behind closed doors if they wished. But everyone gets to watch the game.

Obviously this wouldn’t work for everything. I can hear the three S’s –  spies, screw-ups and Sellafield – being wildly gestured towards as proof of the dangers in adopting such radical transparency. And yes, there’s a handful of genuinely sensitive conversations that we all have an interest in keeping secure. Even so, that still leaves a lot of money on the table.

Playing in front of a crowd gets the best athletes to raise their game. Perhaps Whitehall’s great gamers could do with a bigger audience too.

About the author

Andrew Greenway is a former senior civil servant now working as an independent consultant. His civil service roles included deputy director of data analysis and horizon scanning at the Government Office for Science, and a programme manager working on digital projects for the Cabinet Office

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