What should an office for value for money do?

There’s no point in raising money if it won’t be spent well. Joe Hill lays out how the office for value for money could actually help.

We are often reminded of the cost of government – but we rarely stop to ask whether any of it is good value. A pound raised here, or cut there, is meaningless if billions are already being wasted.
Anyone with a vague interest in public policy follows the Autumn Statement and Spring Budget. But how many have heard of the estimates process, where government departments are given their budgets? Or the laying of each department’s annual report and accounts, where they explain what they did with all the taxpayers’ billions?

Westminster rarely stops to think about what the taxpayers are getting for the 33.5 per cent of GDP that HMRC takes. If anyone was paying attention, there would have been an outcry at the fact that so-called ‘outcome delivery plans’ – where departments account for what they will do with the money – were effectively discontinued in 2021.

If parliament did stop to consider the benefits of what was being spent, rather than just the size of the bill it was footing, then it might think differently about whether any of it was good value.

The purpose of the office

The new government has provided a chink of light in this otherwise depressing state of affairs: a new office for value for money. I have some suggestions for where this new Treasury unit should start. Mainly, that it should focus on those areas that fall down the cracks between departmental budgets.

When I was a civil servant at the Treasury, most teams essentially man-marked government departments. It’s an obvious way to run government finances – you make each department accountable for their budget and have a dedicated team at the Treasury marking their homework. But what about problems which cut across more than one department? In those cases, the accounting officer (usually the top civil servant) can simply throw up their hands and say it’s not their problem.

This is the perfect task for a central office for value for money: focus on the problems which no one person is accountable for, and so no one really bothers to care about. And there are so many cross-cutting issues.

Some starting ideas

How about producing a value for money assessment of failing to manage out the worst performers? We know Whitehall is terrible at this, fearing tribunal costs without factoring in the ongoing productivity hit, never mind the direct costs of keeping paying them. And how about reviewing the actual cost-benefit of paying more for brilliant people who could make government better, rather than penny pinching and failing to attract the top talent?

Or how about working out a way of assessing the value proposition of AI that doesn’t assume humans perform with perfection, and working to update the Treasury’s guidance on project evaluation? It could even look at the pernicious impact of red tape on infrastructure projects across public service areas, from prisons to science labs to train tracks.

The Budget made significant investments in public services, which the Chancellor said in a speech last week “comes with the clear expectation of better value for money”. The clock is ticking ahead of the Spring Spending Review, and simply calling for better value from public spending won’t make it so. If this new Treasury unit is going to help address the systemic waste across Whitehall, it is going to need to take on the problems which nobody else in Whitehall is willing to. That way we know every extra pound raised will actually be spent to good effect.

Joe Hill is policy director at Reform think tank