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In the wake of chancellor Rachel Reeves’ landmark speech earlier this week into the state of the public finances, a leading think-tank has doubled down on its call for the introduction of five year spending reviews to provide more certainty to long-term planning.
The Institute for Government chose this week to publish its latest paper on public finance reform, How to run the next multi-year spending review which builds out from the proposition that the approach taken in recent spending reviews “Is not up to the job of achieving Labour’s missions.”
Under the new chancellor, the report says, the government must “ensure it shakes up the process and prioritises spending that will fix underlying problems in the economy and public services, rather than patching them up with short-term sticking plasters.”
“The early signs about this government’s approach to the spending review are positive that it means to make these changes.”
The IfG welcomed Reeves’ decision to revert back to a single major fiscal event per year. “Sticking to this commitment will help slow down policy making and make it more strategic; but Reeves will need to resist the temptation that her predecessors have succumbed to of falling back into having two major fiscal events a year.”
However, the report suggested the announced reforms on the timing, frequency and scope of spending reviews will only go so far in delivering genuine change. More is needed: “In particular, missions must be clearly articulated at the start, and incorporated into a reformed performance framework for departments.
“Cross-government collaboration should be encouraged by allocating cross-cutting budgets related to missions and holding negotiations with multiple secretaries of state at the same time, rather than bilateral negotiations that mean ministers tend to retreat to their own silos.
“Finally, the next few months provides an opportunity for the government to improve the evidence base underlying some of their key priorities, through the commissioning of policy reviews.”
