Steve Richards: Get value for money from government

If users could track how their money is spent, minds would be focused in Whitehall
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The Independent Online

The Chancellor, Alistair Darling, hosted a lunch recently for a small number of environmentalists. With next month's Budget in mind Darling wanted to explore ways in which green policies could boost the economy. Listening attentively and taking notes, he intervened occasionally to make the observation: "I see it all comes down to the Government spending more money".

More generally the Chancellor conveyed a degree of enthusiasm for the ideas generated at the gathering. I expect him to announce a low carbon fiscal stimulus in the Budget, a more modest version of President Obama's epic proposals. But it does come down to the money and the Government has not got much of it to spend.

I suggested recently to someone else in the Treasury that next month's Budget would be more significant than usual, economically and politically. The senior figure said warily in response: "Why do you think that when we've got no spare money to spend?" We shall see what happens next month, but already the broader context is fixed. The Government has got no spare cash.

The degree to which the economic crisis changes political assumptions is still underestimated. Not so long ago the debate in the Conservative party and between the parties was over how to spend the proceeds of growth. None of the parties has fully acclimatised to a situation where there is no growth.

Convinced that the increases over the last decade have been a total waste, some on the right can hardly wait for the spending axe to fall. I have never understood the perverse argument that public investment is a waste. The appeal of the argument exposes a failure on the Government's part to link higher spending with a populist language. Mrs Thatcher's genius was to make her fleeting monetarist crusade seem necessary and sensible: "In our home in Grantham we did not spend more than we earned. The country should do the same".

No minister in recent years has offered an alternative version: "When we want to improve our homes we spend money and get the benefits. If we want to improve the country's schools, hospitals and transport we need to invest." Virtually alone in the western world there seems to be a powerful consensus in Britain that public services can magically improve without spending money.

Still, as the debate about public services moves into a new more stringent era, there is an urgent need for a new focus on efficiency. Those of us who have argued for European levels of investment must accept that some of the cash in recent years has been wasted. That does not mean the principle of higher investment was wrong, but the way the money was spent needed much more scrutiny. Not even members of the Cabinet knew, for example, about how much more GPs were going to earn under their new contracts.

More widely there are parts of the public sector that are over-staffed, complacent and reluctant to change. There are too many people in non-jobs that have no direct link with the provision of the services. Some of the top officials are ridiculously over-paid. Local authorities have fewer powers and responsibilities than 30 years ago but chief executives are paid a fortune.

Two significant sets of proposals would help to address the lack of accountability that leads to a comfortable complacency in parts of the public sector. The first comes from the all- party pressure group Reform which has been reviewing the Civil Service. One of the craziest anomalies in Britain is the way semi powerless ministers are scrutinised around the clock and yet civil servants, responsible for the implementation of policy are invisible.

Reform argues that the doctrine of ministerial responsibility should be abolished. Instead ministers should be responsible for the strategic direction of policy and officials held to account for delivery. I would go further and suggest that, if policies are poorly implemented, senior civil servants should appear on the Today programme at 8.10am and on Newsnight to explain why. That would focus their minds.

I doubt if it will happen. When a new government arrives in power, it needs the goodwill of civil servants so does not challenge them. In mid-term a government is usually too unpopular to have the authority to act without a thousand deranged critics screaming about the neutrality of the civil service and warning that we live in a police state. Towards the end of a term it is too late. An election looms and another party might be about to take over. The fact that Reform seeks the support of all the parties for its proposals gives some cause for hope, but I would not put much money on sweeping changes.

Another proposal might have more chance of being implemented fairly soon. The shadow Chancellor, George Osborne has proposed the equivalent of America's Federal Spending Transparency Act that enables US taxpayers to scrutinise online every item of federal government spending of more than $50,000. He has promised that anyone in the UK will be able to find out online, "where their taxes are being spent and use this information to hold the government to account".

This is a good idea. Nearly always such massive sums are highlighted in debates about public spending in which the arguments are close to meaningless for most people. But if the users of services are able to track how their money is being spent on specific services, I suspect that, again, minds would be focused in Whitehall and beyond.

On the day that Osborne first proposed this new form of online accountability, I bumped into Stephen Carter, who was Gordon Brown's chief adviser at the time. He told me it would never happen. But his response also reflects the complacency of the sheltered darkness, an assumption that light will never get through.

Forget about the simplistic debate about choice in public services. That was always a naive fantasy even in the years of economic boom, giving users of services false hopes of what was feasible. Making the providers more accountable is a more realistic way of getting value for money. It needs to happen quickly as we adjust to an era when it all comes down to money and there is not a spare penny to spend.