Authorising Government expenditure: steps to more effective scrutiny Contents

4Information provided to the House

For someone who is not knowledgeable about the way the system works, the Estimates are completely inaccessible.

—Professor David Heald70

Presentation of the Main Estimates and Supplementary Estimates

94.In the course of our inquiry, many have pointed out that poor presentation of the information in Estimates presents an obstacle to effective scrutiny. The content of the Main Estimates for 2015–16, which ran to some 652 pages, was described by a witness from the OECD as

“very technical and really quite impenetrable”71.

Professor Heald suggested some means of improvement:

“Some of it goes back to presentation. Imaginative infographics can help. Good, brief explanations of the technical terminology would be helpful as well. The crucial point where I think that you could make quick improvements is presentation”.72

In discussions with Lord Levene and Sir Peter Gershon, both of whom have substantial experience of exercising control over spending plans in the public and private sectors, both emphasised the substantial benefits for readers which could be provided by better infographics, such as waterfall charts.

95.All of our witnesses thought that the current presentation and content of Estimates could be improved. The layout is dense, the tables are not easy to read, and terminology and acronyms used are often specialist or unexplained. Professor David Heald suggested that the inaccessibility of the documentation was related to the relative lack of importance of Estimates documentation in the context of multiannual spending reviews:

The reason why the Estimates documentation is so unintelligible is that it is irrelevant. Nobody is going to put much effort into it, first, because it is not the point of decision, and secondly, you need an enormous amount of knowledge to understand what the numbers mean.73

96.The concerns expressed are not new. Our predecessors examining proposals for the introduction of Resource Accounting and Budgeting were particularly concerned with the presentation to the House of information in a clear and accessible format. In 2007 the Treasury Committee recommended that the Government “replace the current system of [financial] authorisation based primarily on Estimates with one linked more clearly with the public expenditure planning and control system, to improve the clarity, consistency and comprehensibility of the documents placed before the House of Commons to seek authorisation for expenditure and to report on that expenditure.”74 The Government sought to implement this recommendation through the Alignment Project, to “achieve better alignment of three different expenditure frameworks—Parliamentary Estimates, departmental budgets and departmental resource accounts—consistent with the fiscal rules.”75

97.Whatever benefits have been brought by the alignment of Government expenditure frameworks, it is not immediately apparent to us that they have resulted in greater clarity of Estimates documentation placed before the House. While the Chief Secretary to the Treasury indicated to us that there were necessary constraints on the format and presentation of Estimates documentation, we consider that steps could be taken to make these publications clearer and more accessible to Members and the electorate without introducing political material which would compromise their function.76

98.Better and more consistent financial information, in content and in presentation, was expected to be a substantial benefit of the Alignment Project. Our experience from examining recent Estimates booklets suggests to us that, while consistency in the figures presented may have increased, the benefits of presentation expected from alignment are yet to be realised.

99.There is little doubt that the format and presentation of Estimates documentation could be considerably improved. We recommend that the Treasury work with the House of Commons Scrutiny Unit and the National Audit Office to prepare proposals for change to the format and content of future Estimates, and explanatory material accompanying Estimates, for consideration by the House. The aim should be to produce proposals for reform which, while meeting necessary legal and audit requirements,

100.Estimates documentation is published online in PDF format only. Publication of the tabular data in spreadsheet format is an essential requirement of open data standards. We recommend that, starting with the Main Estimates for 2017–18, all tabular data in Estimates booklets be published online in spreadsheet format.

Estimates memoranda for select committees

101.Alongside the Estimates themselves, government departments are now required to produce and submit to the relevant select committee an accompanying memorandum, explaining the content of the Estimate, the changes it contains and the reasons changes are proposed. Without reading these memoranda it can be difficult even for specialist staff to understand what the intended purpose of spending sought in the estimate is, and the justification for spending public money. The content of the memoranda follows guidance from the House of Commons Scrutiny Unit, endorsed by the Liaison Committee and included in the Treasury’s Estimates manual.77 This may be supplemented, on occasion, by specific requirements stipulated by individual select committees. The memoranda are subsequently reported by each committee to the House and published on the Committee’s website.

102.Scrutiny Unit staff read and review these memoranda, using them to brief Committees on the content of the Estimates. They will, if requested, advise on whether the memoranda sufficiently explain planned expenditure and follow the guidance stipulated.

103.While the memoranda fulfil a useful function, their quality, even within a single document, can vary, affecting their overall usefulness. The Clerk Assistant told us that memoranda “often contain some elements which are written in language and in a way which makes them difficult for anyone without prior or very specialised knowledge to understand or interpret … one of the most common issues is a lack of genuine explanation as to why budgets or changes are proposed for a particular programme, and what precisely [the spending] is intended to deliver”.78 Estimates memoranda would benefit from better, clearer explanations and standard application of best practice in order to be more consistently useful to their potential readership, within committees and beyond. Our suggested other reforms mean that in future these memoranda may have a wider audience than at present.

104.Since 2015, the Scrutiny Unit has increasingly been producing its briefing for committees on Estimates in visual form, using graphs, charts and data visualisations, highlighting key items of interest and illustrating them graphically in order to promote better understanding. These briefings would be much less helpful without the information that memoranda provide.

105.Estimates memoranda are often not published beyond select committees until some weeks after receipt, which in the case of Supplementary Estimates is usually after those Estimates have been authorised by the House. In order for Estimates memoranda to be of wider use to Members in understanding Estimates and identifying topics for debate, we recommend that all Estimates memoranda to select committees are in future laid before Parliament and published on the day of publication of the Estimate to which they relate and on the same web page. Select committees would still be able to use the memoranda to question Departments on their plans, and request specific information to be provided within them in future.

106.The Scrutiny Unit reviews the Estimates memoranda on behalf of Select Committees and briefs Select Committees on key items of interest, producing visual representations to promote understanding of Estimates among committee members and to assist in committees’ core task of examining government spending and performance. To develop this work, and to support the proposals for broader member engagement in the Estimates process that we envisage, we recommend that the Scrutiny Unit collaborate with the Research and Information Team of the House of Commons Library to provide Members with background briefing and analysis of Estimates, and specific briefing for Estimates day debates.

107.We recommend that the Treasury and other Government departments work with the Scrutiny Unit to ensure that memoranda better serve the needs of users in explaining and presenting the content and purpose of each Estimate. We recommend that the Scrutiny Unit, acting on behalf of the House of Commons Service, conduct a review of current Estimates memoranda guidance, its application and adherence to it and communicate and disseminate the results of this review and of existing best practice. Select committees should follow up concerns where their departments fail in future to fully meet requirements.

108.The insufficiency of present support for select committees, individual backbenchers and the wider public in understanding the Government’s spending plans underlines the need to protect, and perhaps enhance, the resources applied by the House Service to supporting its scrutiny function.

70 Q 68

71 Q 17 (Scherie Nicol)

72 Q 86

73 Q 80

74 Treasury Committee, Sixth Report of Session 2006–07, The 2007 Comprehensive Spending Review: prospects and processes, HC 279, para 110

75 HM Treasury, Alignment Project newsletter, undated.

76 Q 163

77 Supply Estimates: a guidance manual, HM Treasury, July 2011, para 1.41

78 House of Commons Service further supplementary (EST 14), para 10.

18 April 2017