Ministers plan to streamline funding of public services
By Tash Shifrin
3 December 2009
The government will set out plans to rationalise funding of public services alongside measures to slash the fiscal deficit in the Pre-Budget Report on December 9.
Chancellor Alistair Darling’s announcement detailing how he plans to halve the deficit over the next Parliament and put the public finances back on a stable footing will come under intense political scrutiny.
Attention will be focused on the balance between a squeeze on public spending and possible tax rises as a means to fill the fiscal gap.
There will also be calls for him to publish the next Comprehensive Spending Review or at least outline total departmental expenditure for the coming years.
But Chief Secretary to the Treasury Liam Byrne will also release a Smarter government white paper, outlining the latest version of the public sector reform programme and an IT strategy. The minister’s thunder was, however, stolen by a leak of drafts of both documents, with the Conservative Party publishing the IT paper online.
The leaked draft of Smarter government, apparently approved by the Cabinet on November 25 and originally set for publication on December 1, included plans to restructure the funding of local services, based on initial findings of the Total Place pilot scheme.
Ring-fencing of revenue grants to local authorities, which currently ties up £37.8bn, will be reduced to only 8% by 2010/11, while the 90 different sources of cash to councils will be cut back. The document also said the government would ‘consider introducing a single area-based capital pot’ for all public bodies in a locality.
Raising procurement and back-office standards across government to the level of the best ‘could release £9bn’ a year by 2013/14, it added, while an annual frontline value for money report would be published with the 2010 Budget.
The draft of Smarter government also outlined plans to be detailed in the Budget for rationalising the plethora of inspectorates and co-ordinating the timing of their inquiries.
Shadow chief secretary to the Treasury Philip Hammond said the Conservatives had ‘put a figure on Labour’s failure to deliver efficiency in public spending at £60bn per year’.
He added: ‘We had been told to expect great things from this review, but if this empty document is the best that Labour can do then a change of government can’t come soon enough.’