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10.11.14

Government should introduce five-year spending plans – Lord O’Donnell

The government should introduce five-year spending plans to match the length of fixed-term parliaments, and institute independent assessment of its infrastructure strategies, according to former cabinet secretary Lord (Gus) O’Donnell.

In a recent speech to the Royal Statistical Society on ‘evidence-based policy making in the era of big data’, Lord O’Donnell said: “We now live in a world of five year fixed-term parliaments but nobody has followed up to change our procedures to fit with this new world. We could have a mid-term course correction exercise to refresh the programmes and adjust course depending on how far the public finances had deviated from the projected flight path.”

He added that the five-year plans should include infrastructure strategies setting out the details of spending on major projects, and that before delivery an independent body should assess them: “This is essential: we need to move our accountability system from the ex post ‘blame game’ to real ex ante power to prevent policies going ahead until the relevant body is satisfied with the evidence base and the implementation plans. That body could be an expanded OBR or a new Office of Taxpayer Responsibility (OTR) which would build on the excellent work initiated by John Browne, on handling, and training people to lead, major projects. And it should be staffed by experts from a variety of disciplines.”

These audits would assess whether a policy or project can be delivered within the allotted time and resources, and continued monitoring would ensure that projects remain on track.

Lord O’Donnell also called for an improvement in cross-departmental working at Whitehall. He said there is a lack of mechanisms to encourage departments to invest in work that benefit other parts of the government.

“I doubt there isn't a person in this room that hasn't had a great idea about how to improve outcomes by investing in one area but it has not been followed up because the benefits accrue elsewhere,” he said.

He added that this is a “huge problem”, but while he has a theoretical solution he doubts it will work in practice.

He suggests introducing a new form of Public Service Agreements, which were the Labour governments’ way of specifying desired cross-departmental outcomes, but this time with budgets to go along with the responsibility.

“But I do not know how to make such a system work given the way departments are organised,” he added. “So while this might work in theory I doubt it would work in practice and along the way it would be hugely disruptive.”

(Image: c. Dominic Lipinski/PA Wire)

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