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Spending Transparency – for public and private sectors

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The release of the COINS (Combined Online Information Systems) data yesterday on the range of Government spending is a major step forward.   It will expose many dark corners in Whitehall, make the Government far more accountable, and allow taxpayers far more knowledge of exactly how £650bn of their money is spent and whether it is justified.   Even first glances open up some quite crucial policy questions:

  • It cannot be right to spend £24b a year on tax credits when this is largely a huge disguised subsidy to employers paying below-poverty wages to millions of people on very low earnings.   Obviously the right policy (at vastly less cost in taxes) is a big uplift in the mandatory minimum wage.
  • Equally £1.8b spent on consultants (20% up on the previous year), including £600 million spent out of the NHS budget on management consultants, must be grossly out of scale for genuine value for money.
  • The Government has also apparently incurred bad debts of some £600m a year, a high proportion of which should surely be recoverable.
  • Another finding that sticks out like a sore thumb is that the Department of Energy and Climate Change (DECC)  last year spent more than half its £3b a year budget on dealing with nuclear waste – a huge annual sum that the nuclear industry should be forced to pay themselves, and which should be the clinching argument why any further nuclear build cannot be afforded.

So, bully for the coalition.  Yet lots is still not revealed. This is of course only the first step: the COINS database contains 24m items, but yesterday the Government only released 3.2m items.   Indeed the gaps that remain are perhaps more significant than what has been revealed:

  • The data released is not specific about who received each payment and, even more importantly, exactly what it was for,
  • The data was published in raw format without the software necessary to process it,
  • There are significant omissions, notably on defence expenditure and the security and intelligence agencies, where public scrutiny will still have to contest allegations of ‘national security’ which are often a cover-up for incompetence or poor value for money,
  • A robust evaluation of cost-benefit will also have to include a concrete measure of benefit obtained, based on proper empirical data,
  • ‘Commercial confidentiality’ is another convenient excuse used to exclude material which could be embarrassing, which must be firmly resisted.   And privatised companies operating in important public service areas should be kept within the ambit of this new accountability.   Indeed, since the market is only a partial and imperfect measure of value for money, there is a strong case for improving the efficiency of the top 1,000 private companies by requiring evidence of how the nation’s economic and social resources are being utilised.

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