Photo credit: www.bbc.com

Chancellor Promises Scrutiny and Efficiency in Spending Review

The Treasury is set to instruct government ministers to halt expenditures that do not align with key governmental priorities, as Chancellor Rachel Reeves commits to a rigorous approach against wasteful spending. This directive is part of a broader spending review covering the financial period up to 2029.

As part of the initiative, Reeves will request that government departments identify ways to achieve efficiency savings equating to 5% of their existing budgets. This effort underscores a determination to ensure taxpayer money is utilized effectively.

To further this goal, the budgets of various departments will undergo thorough evaluations conducted by expert panels that include former senior bankers. These panels will provide insights into which expenditures are essential and which can be curtailed.

In response to the Chancellor’s strategy, Conservative critics have voiced concerns about her management of departmental budgets. They accuse Reeves of either lacking oversight of her departments or being unable to balance Labour’s financial calculations without resorting to increased taxation and borrowing.

Shadow Treasury Minister Richard Fuller commented, “While striving for value for money for taxpayers is commendable, Rachel Reeves’ previous actions have primarily benefited Labour’s union affiliates without mandating any accountability or reforms in public sector efficiency.”

Liberal Democrat Treasury spokesperson Daisy Cooper has urged the government to refrain from slashing social care budgets. She warns that such cuts would represent a “false economy” that jeopardizes individual welfare and ultimately strains public finances. Cooper suggests that substantial savings could be realized in the NHS budget through appropriate investment in social care services.

In detailing the spending review, the Treasury emphasized a stringent evaluative process: “Departments will be advised that where spending does not correlate with a priority, it should be discontinued.” The department further stated, “Every pound spent will undergo a line-by-line review to ensure it aligns with the Plan for Change and delivers value for money.”

Last week, Prime Minister Sir Keir Starmer presented his Plan for Change, outlining six critical objectives to be met before the next election. These include increasing disposable income for workers, constructing 1.5 million homes across England, and ensuring that 92% of NHS patients receive treatment within 18 weeks.

The Treasury has indicated that the Chancellor will collaborate with various departments to prioritize funding that supports these outlined milestones. Budget reviews will also incorporate insights from panels featuring former leaders from major banks such as Lloyd’s Banking Group and Barclays, as well as experts from think tanks and academia.

According to the Treasury, these panels aim to offer an objective assessment of what government spending is necessary, drawing from a diverse mix of expertise across different sectors.

Chancellor Reeves stated, “The previous administration allowed taxpayers’ money to be wasted on projects that delivered poor value. This will not be tolerated under my watch; I am committed to maintaining stringent control over public finances and will rigorously combat waste.”

An example of the reforms being considered includes dismantling a program that stationed social workers in schools, which the Treasury cited as a costly initiative—£6.5 million with no demonstrable positive effects on social care outcomes.

In her October budget announcement, Reeves introduced £40 billion in tax increases that largely impact businesses. She acknowledged that this budget was not ideal but deemed it necessary to address a £22 billion fiscal shortfall inherited from the previous Conservative government.

However, she later affirmed that there would be no need to raise taxes further to “top up” public spending. Reflecting on these assertions, the Prime Minister remarked, “I want to clarify that we are not planning to continuously seek more resources; unforeseen factors could alter this approach, but our objective was to manage the difficult elements in the prior budget without constant reassessment.” He pointed to the unanticipated challenges posed by events like COVID-19 and the conflict in Ukraine as potential influences on future fiscal decisions.

Source
www.bbc.com