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Shining a light on public spending is more important than ever

Shining a light on public spending is more important than ever
4 min read

The long recovery from Covid-19 will require more strategic decisions, and it remains to be seen if Whitehall is up to the challenge.

From March 2020 the Covid-19 pandemic has dominated public life but from the outset the Public Accounts Committee was determined to maintain our focus on holding government to account for spending taxpayers’ money.

At a time when government has been granted sweeping powers over its citizens shining a light on public spending is even more important than ever.

Emergency decisions had to be taken quickly and we all know that some were the wrong decisions. The public inquiry is starting in spring 2022 but the PAC, along with our sister committees in the House of Commons, has been examining issues in real time in the hope that government can learn lessons and act on them to avoid compounding mistakes.

The Treasury is already working with departmental permanent secretaries to assess how swift decision-making impacted on the rules around managing government money. While its analysis is positive there are concerns about the VIP lane for PPE procurement and a sense that some companies and individuals had privileged access.

The fast paced decision making has delivered some spectacular rewards - the vaccine procurement programme, and the unorthodox (for Whitehall) but largely effective ventilator challenge (although in the end these are now sitting unused in warehouses). But good government is not just about heralding success. It also must be about acknowledging, and learning from, failure.

The scale of the challenge facing public finances underlines the importance of the work of the PAC

Each year in my annual report I list the departments of most concern. These are areas of government facing significant challenges over and above those created by the Covid-19 pandemic or the UK’s departure from the EU; as well as those with a track record of poor project delivery.

The Ministry of Justice makes the list because almost every departmental responsibility is being changed, the Ministry of Defence for its entrenched project delays and cost overruns, and the Department for Education on many counts.

This year has also created long-term challenges about how government addresses the educational gap for young people, particularly the poorest; supports the mental health of the nation and adjusts to life outside the EU as well as supporting an economy rocked by lockdowns.

The long recovery from Covid-19 will require more strategic decisions, and it remains to be seen if Whitehall is up to the challenge. Attempts at reform have been slow and fraught. And the private sector delivers a large percentage of public services without the long-term accountability Whitehall faces.

Aside from future policy and the impact on government departments, the pandemic has thrown up three important issues.

Firstly, Covid-19 has been one of the first significant challenges affecting the UK which has been dealt with separately by the four nations. Each nation has responded differently. None of their respective approaches were perfect, but there are lessons to learn.

Secondly, in March 2020 Parliament granted the most sweeping range of powers any peacetime government has enjoyed, on the understanding that it would in return be open and transparent in its decision-making. Even with the limitations placed on parliamentary scrutiny by the long months of lockdown, the government has failed to deliver its end of the deal.

Finally, the scale of the challenge facing public finances underlines the importance of the work of the PAC. We need to see more emphasis on results for every pound of taxpayers’ money invested. I have frequently raised concerns about how cuts in one area can lead to cost shunting – whereby another public sector body picks up the tab down the line. The risk of intergenerational cost shunting and unintended knock on effects is high, particularly in relation to spending on Covid-19 and tackling climate change.

The pandemic has reset many issues in public policy and delivery of public services. Many new challenges have arisen but the long-term issues remain unchanged, indeed they are even more urgent as we start to emerge from the pandemic.

 

Meg Hillier is the Labour MP for Hackney South and Shoreditch and chair of the Public Accounts Committee.

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