"The price of everything and the value of nothing"
Policy Director
When he first wrote the line in Lady Windermere’s Fan, Oscar Wilde probably didn’t think his quote would be used to describe the institution of the Treasury. And those in Whitehall who use it today probably haven’t seen the play — though it was last staged on the West End in 2017.
The character Lord Darlington uses the phrase as a description for cynics. I don’t think it’s fair to say the Treasury is always a cynic, but it definitely errs on the side of caution. Equally, Treasury officials might be quick to level the counter that Darlington’s opponent Cecil Graham does — that other Departments are “sentimentalists”, those who “see the absurd value in everything, and don’t know the market price of a single thing”. There are always calls for more public spending, and only HMT has the difficult task of balancing the books. Accusations of “Treasury brain” are easy to level, but few of its critics would really want to roll up their sleeves and take on the job of balancing spending, tax and borrowing themselves.
But with public debt at nearly 100 per cent of GDP, and the highest tax burden in decades, clearly the Treasury’s focus on the price of everything isn’t working any more. The Budget was light on detail, but the Government assure everyone that they have a plan for reforming public spending. The Prime Minister and Health Secretary have both warned the NHS that there will be no more investment without reform. Now of course they have already promised some of the investment, but in her Mansion House speech last week the Chancellor stressed that the Budget announcements “comes with the clear expectation of better value for money”. Which all begs the question — where’s the value coming from? Which reforms?
Because the clock is ticking to the Spending Review next spring, we have pulled together some ideas for the Chancellor’s new crack squad of experts, the Office for Value for Money, headed by David Goldstone as Chair. Our paper out today recommends areas where the Office can usefully focus on driving cross-cutting reform.
It won’t be possible to drive all reform from a small team in the Treasury. Indeed, our previous research has been clear that efficiency is a whole of government effort. But there are some key areas where the Treasury’s own guidance and policy can be critical in driving better value across the board. In particular, these are areas where no one Department holds all the ‘levers’ to drive a reform, so none of them do. Issues like automation and AI adoption, where it’s up to every single department but the web of guidance on evaluation and risk assessment is too convoluted. And the civil service workforce, where individual permanent secretaries are responsible for their workforce spending but it isn’t judged by the same rigorous standards which are applied to test value in other areas.
Money makes the world go around, and in Westminster the Treasury’s fiscal calendar drives much of the business. Twice annual Budgets, the Estimates process, and the laying of accounts: these drive the timetable of what the Government can announce and how. But genuine reform happens (or doesn’t) between those big set pieces. The Government knows the problems, there are plenty of ideas about how to fix them, and with the Office for Value for Money we have a new opportunity to drive reform — the Spending Review will have come and gone sooner than we all think! It’s time to act.