Authorising Government expenditure: steps to more effective scrutiny Contents

Conclusions and recommendations

Why examine the Estimates?

1.Control of Government spending proposals by the House of Commons is the foundation of parliamentary control of the executive. The House must do this job effectively, and must be seen to do it effectively. (Paragraph 16)

2.Spending Reviews have increased in importance over recent years, setting the ceiling on spending plans for many years ahead. They represent substantial political choices about the allocation of public funds. It is only by participating in those choices between competing priorities that the House can effectively discharge its duty to represent the country: the Estimates system is more about control than choice. The House must therefore have an opportunity to consider and debate proposals in spending reviews. We reiterate the 2009 recommendation of the Liaison Committee—which the Government accepted—that it is essential that the Government allocate a day’s debate on the outcome of each Spending Review. One day’s debate is the bare minimum to be allocated: an allocation of further days to debate these highly significant spending proposals would be highly desirable. (Paragraph 20)

3.The Estimates process is an important check on executive action. The principle that Government seeks annual authorisation for its planned expenditure is a vital element of the UK’s constitutional arrangements. That process, as it has now evolved, is not a means of controlling spending decisions. It should not be presented as a sufficient means of performing that fundamental democratic role of a legislature. (Paragraph 29)

4.We will examine the means whereby the House ought to control the spending decisions of the Government in a forthcoming inquiry. (Paragraph 30)

The House’s present arrangements for scrutiny and debate of Estimates

5.The current interval between publication and debate of Supplementary Estimates (often as little as five sitting days) provides very little time to genuinely enable debates to be selected on the basis of the content of those Estimates. Accordingly, we recommend that the Government allows at least five full calendar weeks between publication of Supplementary Estimates and the date allocated for their approval. We consider this to be the likely minimum period necessary for analysis and consideration of proposals, and selection of relevant topics for debate. Without such a change, this House will remain severely constrained in carrying out any effective examination of Supplementary Estimates in advance of their approval. (Paragraph 49)

6.We consider that two of the three days presently allocated for consideration of Estimates should be allocated for debate on the Main Estimates. We recommend that, with effect from the 2017–18 Session, two days of debate be allocated to the Main Estimates and that the remaining day be allocated to the Supplementary Estimates. (Paragraph 52)

7.Substantial changes to the fiscal timetable are under consideration as a consequence of the Chancellor’s decision to move the Budget to the autumn. Autumn Budgets will break the traditional linkages with the timetables for the Estimates process. It would in our view be timely and appropriate to move to a system whereby Estimates are published and authorised earlier in the supply cycle, so that the House has sufficient time to scrutinise and approve them in a manner more consistent with accepted practice in most modern democratic legislatures. (Paragraph 58)

8.Such a change in the annual cycle will have a substantial effect on the financial planning processes of Departments. The introduction of the change could therefore be staged over two or more supply cycles, with the preparation of draft or shadow Estimates to test the operation of the process. (Paragraph 59)

9.We recommend that the Government review the timetable for preparation and presentation of the Main Supply Estimates in order to enable the consideration and authorisation by the House of these Estimates before the start of the financial year to which they relate. We further recommend that the Government consult this committee, the Treasury Committee and the Public Accounts Committee in drawing up proposals to implement this recommendation. (Paragraph 60)

10.We recommend that in any revision of the timetable for Estimates the Government build in a period of at least five sitting weeks between the presentation of any Estimates and the date on which authorisation is expected to be sought from the House. (Paragraph 61)

11.We consider that the present system for allocating debates on Estimates days is not operating as it should. It fails on the one hand to ensure the proper consideration of Estimates on the days set aside by the House for that purpose, while on the other hand failing to provide the Liaison Committee with a means of recommending select committee reports for debate on the floor on their own merits. (Paragraph 77)

12.We recommend that the Backbench Business Committee and the Liaison Committee examine informal arrangements whereby the Backbench Business Committee will receive and determine bids for debates on the three Estimates days to be held each session, while the Liaison Committee will recommend select committee business for debate on three of the days controlled by the Backbench Business Committee in that session. We stand ready to assist those Committees in the practical implementation of any such arrangements. (Paragraph 83)

13.Such an informal arrangement could take effect almost immediately, with no change required to Standing Orders. We consider, however, that a substantial period of preparation is required to ensure that the arrangement is implemented in an environment which will enable the full benefits envisaged to be realised. We envisage that the arrangement we propose be given effect no later than the 2018–19 Session, under a protocol to be determined in consultation with the Backbench Business Committee and the Liaison Committee. (Paragraph 84)

14.Under the current timetable, it is open to question whether it would be genuinely practicable to make the change we recommend for Supplementary Estimates. Even if it were feasible, Members would have limited information on which to base their bids, the Backbench Business Committee would have little time to consider their merits, and announcements on topics chosen would be likely to be done at the very last minute, all of which would reduce the effectiveness of such change. We reiterate the recommendations made at paragraphs 60 and 61 above concerning a minimum period of five weeks for parliamentary consideration of Supplementary Estimates. (Paragraph 86)

15.Our objective is to ensure more effective examination of Government spending plans. Should the pilot we recommend above be proceeded with, we will evaluate the outcomes by the end of this Parliament and recommend, if necessary, that the arrangement be put on a more formal footing for the Parliament to be elected in 2020. (Paragraph 87)

16.To relax the existing rule against amendments to Estimates motions which increase, formally, the total upper limit of expenditure would be a rupture of some magnitude with the presently-understood constitutional settlement between the Crown and Parliament. It could not be undertaken lightly. We conclude that at present we should proceed with a more modest change to arrangements for considering Estimates, though we do not rule out a future relaxation of the rule. (Paragraph 92)

17.The introduction of a Budget Committee, supported by a Budget Officer, was a reform proposed by Sir Edward Leigh MP and Dr John Pugh MP in their 2012 report to the Chancellor on financial procedure in the House of Commons. While we have not examined the implications of such a committee in detail, there are apparent benefits to the establishment of a dedicated committee of the House, with specialist support, to examine and report to the House on the merits of Government spending plans. This is an issue which we may consider further in the context of the House’s participation in spending reviews. (Paragraph 93)

Information provided to the House

18.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. (Paragraph 98)

19.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,

20.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. (Paragraph 100)

21.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. (Paragraph 105)

22.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. (Paragraph 106)

23.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. (Paragraph 107)

24.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. (Paragraph 108)

The block grants to devolved institutions

25.The amounts devolved administrations receive in block grant are largely determined by decisions taken by UK Governments, reflected in Estimates for UK Government Departments and authorised in UK legislation. But the links between spending decisions by UK Departments and the amount devolved administrations receive through the Barnett formula as block grant are not clear, which means that it is difficult for Members to see which Government decisions have influenced the levels of block grant allocated or received. We recommend, therefore, that the UK Government should, at the time of publication of each Main or Supplementary Estimate, improve the transparency of these links by publishing:

26.In the reform of debate allocation which we outline above, we consider that there is scope for debate on the Estimate of a UK Government department in cases where the changes in spending by that department have led to a change in the allocation of funds to the devolved institutions. We recommend that the Backbench Business Committee, in its allocation of debates on Estimates days, consider reserving at least one debate slot in each session for a debate on an estimate particularly affecting, or affected by, the operation of the Barnett Formula. (Paragraph 120)

18 April 2017