Another week, another bail-out. But this time it was the car industry that benefited from a government desperate to be seen to be doing something as the economy collapses.
Whatever happens over the next few months, Labour will get an ‘A’ for effort. It’s recapitalised the banks, reduced VAT, offered a loan guarantee to businesses and promised a huge programme of public works.
All this, apparently, is in stark contrast to the approach taken by Her Majesty’s Official Opposition, which has been labelled the ‘do-nothing’ party for its resistance to this interventionist strategy and lack of an alternative. But this week the Conservatives came out fighting. They promised to create a new culture of financial discipline across Whitehall, with senior civil servants having a ‘fiduciary duty’ to spend taxpayers’ money wisely.
In a wide-ranging speech, shadow chancellor George Osborne called for the finance director role to be beefed up. He also highlighted a National Audit Office report criticising government departments for lacking a professionally qualified FD on their board.
Some of this information is out of date, but broadly it is a positive message that will play well in the finance community. It values the work of accountants and calls for these skills to be embedded throughout the organisation.
The difficulty is how the proposed system, in particular the new duty, would operate in practice. In essence, this appears to echo existing arrangements in local government, where the section 151 officer has a responsibility to local taxpayers to ensure sound financial management.
In local government, one person carries out this role. Osborne’s new plan, by contrast, involves all senior civil servants, making the process much more complicated.
But, in many respects, these are the least of the Opposition’s problems. Osborne might have some eye-catching ideas for improving financial housekeeping. However, the Tories’ big-picture alternative to the government’s interventionist strategy is still at the drawing-board stage.
They will need to do a lot more to successfully rebut the ‘do-nothing’ jibe
