After Osborne's spin, it's time to bring parliament and the public into the spending process

Institutional reforms can reduce the extent to which short-term tactics trump long-term thinking.

As with most spending rounds in recent history, George Osborne’s announcements last week were as much about politics as economics. It was, as the BBC’s Iain Watson noted, a nakedly political exercise, intended to define the battlegrounds for the next general election. In addition to electorally popular protection for schools, pensions and the NHS, the Chancellor attempted to lay a series of traps for Ed Miliband and Ed Balls on social security. It shouldn’t be a surprise to any of us that spending rounds are conducted like this, but it should be a disappointment.

The British economy is still very far from healthy and the government that wins the election in 2015 will still face incredibly grave fiscal challenges. We cannot afford for sound economic policy to be subordinate to the desire for soundbites and election tactics. That’s why parliament and the public have to be brought back into the spending process.

Consider the 2010 Spending Review. It was probably the most important political event of the parliament but it was the result of a rushed and secretive process and was subject to the bare minimum of scrutiny, with the Treasury select committee carrying out a one month inquiry on its content. The Fabian Society Commission on Future Spending Choices today publishes its first report, Spending Wisely, and calls for a comprehensive package of reforms to strengthen the ability of parliament and the public to hold the chancellor to account for the spending decisions he makes.

We think the public should have access to much better information about public spending, so they know where their money goes. One option would be a Citizen’s Tax Statement, which we think would reassure many people that most government money is spent on priorities people share.

Next we recommend that future governments set out 'draft' plans for consultation in advance of major spending decisions. Pre-announcement leaks to friendly journalists and running commentaries on cabinet negotiations just aren’t good enough. If we want proper scrutiny of spending decisions it is vital that parliament, policy experts and the media are given the chance to comment on relative priorities, review the evidence and rationale informing decisions and highlight unforeseen consequences. In fact, ministers ought to welcome this change as it would give them the freedom to change their minds without being accused of a humiliating climb-down.

Alongside this draft  we also propose a new long-term spending statement, which would require the government to explain its thinking on the direction of public spending over 10 or 20 years. Subsequent year-by-year decisions would then need to relate to this multi-decade perspective, or minsters would need to explain why not.

The commission suggests that the Office for Budget Responsibility should become a servant of parliament, charged with giving MPs the firepower to hold the chancellor and ministers to account. The OBR emerged in 2010 from a Conservative election manifesto promise and has transformed how fiscal policy is debated. But it focuses on the announced policies of the government of the day, so is unable to aid parliamentarians in weighing up the merits of alternative approaches. For the sake of good governance, its remit could be expanded, so that it is more like the US Congressional Budget Office. Finally parliamentary scrutiny might be strengthened by the creation of a separate Budgetary Committee, easing the burden on the chronically overworked Treasury select committee.

But simply scrutinising the spending allocations is not enough. The commission also calls for a new institution to advise on how to get more out of public spending. We propose the creation of an independent Office of Public Performance to police the quality of public spending and to help build public trust and understanding. Its aim would be to ensure that when decisions are made, as much attention is focused on what they are intended to achieve, as what they cost.

Politicians won’t stop being politicians. But institutional reforms can reduce the extent to which short-term tactics trump sound, long-term thinking. The public need to have confidence that decisions are being taken for the right reasons and the only way for that to happen is to shine more light on the murky process of setting budgets. 

George Osborne leaves 11 Downing Street in London on 19 June 2013. Photograph: Getty Images.

Andrew Harrop is general secretary of the Fabian Society.

Photo: Getty Images
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Sadiq Khan is the radical Mayor that Londoners need

I've lived and worked in this city all my life. Sadiq is the mayor we need, says Andy Slaughter MP.

I have lived and worked in London all my life and for the past 20 years, as council leader or MP, represented one of its most politically fought over and eclectic parts, Hammersmith & Fulham.

I do not exaggerate in saying much of what makes London communities work is on the line in next year’s Mayoral election.

My constituents, already facing five more years of a Tory Government, need a champion in City Hall.

The current mayor has not proven capable, siding with vested interests over the needs of Londoners.

Whether it is destroying the 100 year-old Shepherds Bush Market or demolishing 750 good quality council houses in West Kensington to make way for high-rise luxury flats, Boris Johnson used his planning and regeneration powers against the wishes of residents and small businesses alike.

Boris was keen to take control of the London NHS but silent in speaking out against hospital service closures at Charing Cross, Ealing or Lewisham.

Another Tory Mayor, however presented, will be no different.

We must win to prevent the hollowing out and social cleansing of London, but we must win for positive reasons too.

That’s why we need a Mayor with a radical and bold agenda for a progressive city. For me, that person is Sadiq Khan.

The son of a bus driver and immigrant parents who moved to London for the opportunities many take for granted, he is a Londoner born and bred.

His family gave the young Sadiq the platform on which he built a career as a leading human rights lawyer, campaigning Member of Parliament and now a frontrunner for the Mayoralty.

That track record of standing up for the rule of law, universal human rights and access to justice is why so many leading figures from the legal world are today supporting Sadiq’s campaign.

Writing yesterday, in a letter to the Solicitors Journal, Michael Mansfield QC, Imran Khan and Matthew Ryder - part of the legal team who secured justice for the Lawrence family - add their support, stating that Sadiq as Mayor would “represent the very best of modern, tolerant and diverse London".

Shadow Attorney General Willy Bach and Shadow Solicitor General Karl Turner, former Director of Public Prosecutions Sir Keir Starmer, former Shadow Attorney General Emily Thornberry MP and leading human rights lawyers Baroness Helena Kennedy and Ben Emerson, are all supporting Sadiq.

What unites Sadiq’s supporters is a desire to see London governed by a dynamic and modern Mayor, suited to represent this vibrant and diverse city.  That person has to be Sadiq Khan. He can be the champion that Londoners need.