Andrew Griffith: A simple reform to dramatically improve Parliament’s scrutiny of government spending

Andrew Griffith MP writes in his personal capacity as Member of Parliament and a former FTSE100 finance director. 

This Thursday, Parliament will spend a whole day discussing incontinence and water safety education. The former is a debilitating condition for which the public realm makes inadequate provision, and the later clearly saves lives.

But contrast this with the cursory debate and Parliamentary scrutiny for the decisions embedded in last week’s £2.9 trillion public spending review, which will impact the lives of everyone in the UK.

Britain’s public finances are in crisis due to rising debt, lower growth, and trillions of unfunded liabilities about which governments of both flavours have not been honest for decades. Ironically given what Parliament is debating this Thursday, when it comes to public spending there is both incontinence and the risk of the whole nation drowning!

As Kemi Badenoch said in a well-received speech last week, we are in an economic crisis with debt interest of over £100 billion a year and welfare spending out of control.

It is time for a profound change in the public conversation about what can be afforded. If MPs wish to remain relevant, better scrutiny by Parliament of spending decisions must be at the heart of this. As a former finance director, I would have had more challenge from shareholders over a modest annual advertising budget than Parliament gives to spending commitments which may saddle a generation with unserviceable debt.

Most accept that the scrutiny of legislation by the House of Commons is often poor. The excessive power of the executive, rushed drafting, the foolish desire to pass more and more legislation in every successive session, and the huge reduction in the Commons’ sitting hours since the Noughties combine to produce a poor-quality end product.

But the absence of debate on vast government spending decisions makes Parliament’s consideration of new laws look positively Athenian by comparison.

That’s possibly a consequence of the fact that the number of qualified lawyers (as well as the odd pretend one) in parliament outweigh the number of accountants almost tenfold. I acknowledge the excellent role played by the Public Accounts Committee, but my point is about the engagement by all Members of Parliament on such an important aspect.

So called ‘Estimates’ debates are poorly understood, sparsely attended, and not covered by the media. Parliament is not furnished with sufficient time or information to perform its role of scrutiny. How could this be reformed?

First, change the names of these debates to ‘Government Spending approval for Department of X’ supported by a full line by line analysis of the departmental costs and budget assumptions, published 21 days in advance so that written questions may be asked and answered properly prior to debate.

Hold one day of debate for each major government department (smaller departments to be combined) to take place sufficiently in advance of the start of the fiscal year that spending may be amended if that were Parliament’s wish, and preceded by a dedicated cross-examination session of the relevant select committee with the accounting officer (the permanent secretary) of the department.

Additionally, consider a role for the House of Lords, where members would have the time and experience to apply and yet are not today involved in financial decisions at all.

Comparison with the US offers some interesting insights. The director of the well-resourced congressional budget office (CBO) is appointed jointly by the speaker of the U.S. House of Representatives and the president of the senate – equivalent to our speaker and lords speaker.

The CBO therefore works for the legislature, not the executive, unlike our own Office for Budget Responsibility whose head is appointed by the chancellor of the day.

In time, a future Conservative government will need to take the tough decisions to rebalance what can be afforded. But regardless of individual party policies, we need to have the honest debate required about the country living beyond its means.

These structural reforms would be a big step towards better scrutiny – and could be decisions swiftly taken by Parliament itself.