Why it's time for a House of Commons Budget Committee

Posted On: 
10th July 2019

It is vital that government spending plans are properly scrutinised by MPs before any taxpayer money is paid out. The time has come to create a House of Commons Budget Committee, says Charles Walker

Chancellor Philip Hammond presents the 2019 Budget. The ability of MPs to scrutinise spending plans is at best limited and at worst seriously deficient, the Procedure Committee has claimed
Credit: 
PA

The requirement for the House of Commons to approve government spending plans is a fundamental constitutional principle.

But after a lengthy and detailed inquiry, the Procedure Committee has concluded that the ability of MPs to scrutinise spending plans is at best limited and at worst seriously deficient. This month alone we have signed off more than £300bn of spending with just a cursory debate.

There is, of course, excellent financial scrutiny taking place in many parts of the House of Commons. The Public Accounts Committee is renowned for the quality of its ex-post “after the event” scrutiny of spending on particular projects and programmes, and for its symbiotic relationship with the National Audit Office.

The Treasury Committee, meanwhile, diligently and effectively investigates a wide range of financial and fiscal issues across its broad remit.

However, unlike legislatures in almost every other major democracy, we lack any committee to effectively scrutinise public spending.

The Procedure Committee’s most recent report says the time has now come to create a dedicated House of Commons Budget Committee. Such a committee would take a leading role in examining the rationale behind decisions made during spending reviews, and to consistently monitor the reviews’ implementation.

There are a number of options open to the House, and our report does not suggest any one particular model.

Our counterparts in the Irish Dáil have a new Committee on Budgetary Oversight to carry out scrutiny of revenue and expenditure options.

The Italian parliament uses the “rapporteur” system to utilise the expertise of departmental committees to feed in to the conclusions made by a central budget committee on government spending allocations.

Meanwhile at Holyrood, the Scottish parliament’s newly-revised budget process allows a period of pre-budget consultation between the parliament and the Scottish government that ensures concerns over spending plans raised by committees receive a formal response.

The Procedure Committee’s predecessors in the 2015-17 parliament found that the information contained in the estimates documents produced by our own government’s departments was insufficient and unclear, and that the estimates timeline – whereby approval for the bulk of government money in any financial year occurs after that year has begun – was unfit for purpose. Regrettably, I fear that this is still very much the case.

But it is more than just a case of updating our processes. There needs to be a step-change in how information about estimates is presented – both to MPs and to the public.

The government must do much more work to demystify expenditure planning and should make it clearer just how it uses taxpayers’ money.

Our colleagues in the Canadian and New Zealand parliaments are provided with abundant information at a much more granular level, and we challenge the UK government to aspire to similar levels of clarity and information.

It is also vital that there is effective in-house support to help parliamentarians in their work in budgetary scrutiny, and the model of a Parliamentary Budget Office – as used in many countries – to give specific support to a Budget Committee is certainly attractive.

I would like to pay tribute to the excellent team of experts who make up the House of Commons Scrutiny Unit, which supports committees undertaking financial scrutiny, but I would ask the House authorities to examine how the Scrutiny Unit could be enhanced, with a view to developing it into a Commons Budget Office.

I am grateful to all those members and staff of the Procedure Committee who have worked so diligently on this detailed inquiry, which I am confident will lead to real reform in how taxpayers’ money is scrutinised by the very people those same taxpayers elect.

Charles Walker is Conservative MP for Broxbourne and chair of the Procedure Committee