Report on Parliament’s scrutiny of Government finances

• Report: Financial Scrutiny: Parliamentary Control over Government Budgets
• Liaison Committee

In the White Paper the Treasury put forward plans for major reform of the way expenditure figures - the Estimates for the current year which require the approval of the House - are presented to Parliament. This would align them more closely with the expenditure plans already published for future years. The Committee overall supports the detailed proposals for alignment and believes they have the potential to be of major assistance to the House in its work, as well as to others who follow these matters. Above all, they will:

• make the Government’s requests to Parliament for spending authority easier (though not easy) to understand; and
• mean that the sums that Parliament approves are on the same basis as those actually used within Government for setting the budgets of each Department.

This will enable better scrutiny by individual Members, by the House’s Select Committees and by other interested parties. However, it will not in itself deliver better scrutiny and control by the House as a whole. That will require also more effective procedures for consideration of expenditure proposals on the floor of the House. The Committee’s report today therefore proposes that:

• the scope of debate on the days set aside for these matters be broadened to allow genuine examination of future spending plans, allowing proper scrutiny before plans are almost irretrievably firmed up in the Estimates; and
• two additional days’ debates be set aside for formally debating Estimates and spending plans (in accordance with the Government’s own initiative to provide opportunities for debates on these matters).

While the House scrutinises expenditure all the time - through parliamentary questions, statements, general debates and legislation, and Members are already able to precipitate debates, vote on individual Estimates and force reductions in Estimates - the Committee considers that the House would benefit from an extension of procedures to provide for wider, but nonetheless focused, opportunities to examine future expenditure plans, as well as current Estimates. The Committee believes that the proposals in the Alignment Project White Paper, together with the proposals in today’s report, will help to provide such opportunities.

Committee Chairman Alan Williams said:

"Effective monitoring of government expenditure - and ultimately the exercise of effective control over it - is one of the core functions of the House of Commons. This function is pursued day in and day out by the House, through inquiry and debate on the policies underlying expenditure, on priorities, and on overall government spending, and through examination by the National Audit Office (NAO) and the Committee of Public Accounts (PAC) of past expenditure.

"However, there has been a broad consensus for some time that the way the actual public expenditure figures underlying Government programmes for future years are controlled, needs to be overhauled to make the process much more understandable and useful. To this end we welcome the Alignment Project White Paper, while also today proposing additional opportunities to boost the House’s effectiveness in financial scrutiny."