Inside the Counting House (Jan 2006)

Alex Brazier and Vidya Ram
ISBN 978 0900432 92 7
£5 or available free via download 

Parliament is responsible for authorising and scrutinising over £500 billion of public expenditure. This interim paper, part of a major study by the Hansard Society, considers how effectively this work is carried out. Inside the Counting House highlights the strengths and weaknesses of the current system ahead of a larger final report, which will be published in spring 2006 and which will identify options for reform.

Parliament has faced criticism for the way that it carries out scrutiny of public expenditure. For example, 8 December is one of only three ‘Estimate Days' in the parliamentary session during which MPs debate and authorise government spending plans. On these days debate and approval is regarded as a formality and large sums of public money are given authorisation without any detailed parliamentary scrutiny. In the December 2004 Estimates Debate, Parliament authorised over £320 billion of government expenditure following a two hour debate, which primarily focussed on IT projects.

The Hansard Society discussion paper notes that recent reforms have led to improvements in the system, including:

• Improved select committee scrutiny of financial matters, prompted by the establishment of the Scrutiny Unit, the introduction of core guidelines for their work and the valuable information contained in departmental reports;
• Quicker and greater access for Parliament to government spending plans and reports;
• The introduction of Resource Accounting and Budgeting and other reforms have improved the quality of information given to Parliament;
• Extensions to the remit of the National Audit Office, have improved the way that government accounts are audited.

However, the paper also notes that despite these improvements, and the good work undertaken by select committees, including the Public Accounts Committee, much remains unchanged. The report expresses particular concern over:

• The impact of the increasing complexity of the budget on Parliament's ability to scrutinise the way government raises public money;
• Insufficient time for MPs to debate and authorise spending plans and lack of powers to make alterations on this matter;
• Difficulties with parliamentary scrutiny of new initiatives such as the Private Finance Initiative.

This project is funded by PriceWaterhouseCoopers and the Chartered Institute of Public Finance and Accountancy.