Charlie Elphicke is a member of the Treasury Select Committee and is MP for Dover & Deal.
Next year, the Government will spend £840 billion. That’s some £31,000 per household. It’s an incredible sum of money. So it will come as a shock to most readers that there is hardly any Parliamentary oversight of how this money is spent. In fact, there’s so little oversight that, last month, just under £300 billion of spending was voted through by the Commons without any debate – or even a vote. This needs to change – which is why I am making the case to establish a powerful Parliamentary spending watchdog, a Budget Committee, to stop hard-earned taxpayer cash being wasted.
You might think that the powerful Public Accounts Committee and the National Audit Office already do this. Think again. They look at how well things have gone after the money has been spent. Some £300 million was spent on an airport in the South Atlantic island of St Helena that should never have been built. We will never get back the £300 million odd that was spent on it. The Budget Committee will close the stable door before the horse has bolted.
In recent years, parliaments around the world have been setting up budget committees and parliamentary budget offices (such as the well-known Congressional Budget Office). Our Parliament has not kept up with these developments – so much so that OECD experts consider the Commons to have one of the weakest spending oversight systems in the entire OECD.
A Budget Committee could make a real difference. Armed with the expertise of a Parliamentary Budget Office, MPs could have challenged why the NHS was still ordering fax machines well before the eagle-eyed Matt Hancock discovered this, and put a stop to it last Christmas. Or question why some NHS trusts pay twice as much as others for exactly the same product. How can we get value for money out of HS2? Are there ways that Government could deliver computer projects without them going wildly over budget while failing to produce the hoped for benefits?
These are all important questions. Yet they are generally things that are looked at in detail by MPs only after they have happened. We need to stop them happening in the first place if we are to stop wasting taxpayers’ money. Instead of lessons learned, we need to get it right first time.
The work of the Budget Committee does not just apply to oversight of individual projects. It should also embrace the three year piece of political theatre which is the Spending Review. All too often complex and detailed budgetary work is decided in a flurry of salami-slicing at the end of the day. With a powerful and independent Parliamentary Budget Office, spending reviews could be made rolling, led by Parliament, with a zero-based approach focused on cutting waste and seeking efficiencies.
The Treasury figures would be subject to independent checking, and detailed questions could be asked before projects and plans are signed off. Accordingly, before Parliament signs off on further vast sums for HS2, serious work could be done on where it is going, what difference it will make and whether existing budgetary governance is adequate for that project. Taking a longer-term approach would mean risks as well as long term costs and benefits could be assessed.
The new Budget Committee would support, not supplant, other Select Committees. At the moment, very few select committee reports cover finance. The new Parliamentary Budget Office could help departmental Select Committees with the information and expert guidance they need to enable them to hold their departments more effectively to account.
As things stand, out of 13 recent reports, only one Health Select Committee report has covered spending. Two out of 27 recent Treasury Committee reports cover spending, while two out of twelve recent Housing, Communities and Local Government Select Committee Reports cover spending. It is a question of filling a big gap that right now is not being adequately met. Not for want of determination but because our Parliamentary systems have not kept pace with the modernisation of Parliamentary budget oversight that has taken place across the rest of the OECD.
The impact if we get this right could be huge. A saving of just over one per cent of the £840 billion to be spent next year, would be an incredible £10 billion. £10 billion is the equivalent of a cut of 2p in the basic rate of income tax – or getting on for the entire annual police budget.
It’s time we got more bang for the taxpayer buck.