Rachel Reeves vows to take an ‘iron fist against waste’ – as Chancellor launches the biggest audit of government spending in almost two decades_Nhy
Rachel Reeves has vowed to take an ‘iron fist against waste’ as she launches the biggest audit of government spending in almost two decades.
Every pound of Whitehall spending will be examined ‘line-by-line’ in the Chancellor’s spending review, which will not be completed until June.
Ms Reeves will tell government departments to find savings in their budgets – as she warned she would ‘not tolerate’ taxpayers’ cash being spent on poor value projects.
The review – covering three years – will be focused on meeting Labour‘s priorities. It will be the first ‘zero-based’ exercise since 2007 – starting from scratch with every expense to be justified.
Departments will be told to stop spending if it does not contribute to a priority.
Budgets will be scrutinised by ‘challenge panels of external experts’ – including former senior managers from banks including Lloyd’s, Barclays and Co-operative Group.
Ms Reeves said last night: ‘By totally rewiring how the government spends money we will be able to deliver our Plan for Change and focus on what matters for working people.
‘The previous government allowed millions of pounds of taxpayers’ money to go to waste on poor value for money projects.
Rachel Reeves speaking at a press conference after a meeting of Eurozone finance ministers in Brussels. The Chancellor will say she would ‘not tolerate’ taxpayers’ money being spent on poor value projects
Ms Reeves’ warning on waste came as a report into the growth of red tape revealed some of Britain’s biggest watchdogs are growing faster than the sectors they oversee (file photo)
‘We will not tolerate it; I said I would have an iron grip on the public finances and that means taking an iron fist against waste.
‘By reforming our public services, we will ensure they are up to scratch for modern day demands, saving money and delivering better services for people across the country.
‘That’s why we will inspect every pound of government spend, so that it goes to the right places and we put an end to all waste.’
The Chancellor’s review will also set out a timetable for achieving the party’s ambition of raising defence spending to 2.5 per cent of GDP.
But she told the Mail at the weekend that any extra cash for the military would have to come out of the same ‘spending envelope’ as other priorities, such as schools, hospitals and the police.
Ms Reeves’ warning on waste came as a report into the growth of red tape revealed some of Britain’s biggest watchdogs are growing faster than the sectors they oversee.
Research by the Policy Exchange think-tank has found that headcount at seven major regulators grew by 84 per cent over the past decade.
The Financial Conduct Authority, which regulates banks and other City businesses, has seen staff levels double (116.6 per cent increase) since 2013-14.
Numbers at the Financial Reporting Council, in charge of accountants, have more than tripled (256 per cent) while the Competition and Markets Authority has seen a 69.8 per cent increase.
The report has been backed by former Cabinet Secretary Lord Sedwill (pictured in 2020)
Over the same period, however, the number of people working in financial services and related professional services only grew by 6.5 per cent.
Headcount at broadcast regulator Ofcom has risen by 87.7 per cent despite job cuts across the TV industry.
The biggest 17 watchdogs spend £5billion a year and employ 39,000 people, the report says, but the overall cost of the ‘regulatory state’ including the bureaucratic burden on businesses is put at some £70bn.
It said the UK’s regulatory rulebook has experienced almost ‘unchecked growth for decades’, imposing increasing costs on businesses, damaging innovation and making the lives of public servants and professionals ‘increasingly miserable’.
The report blames a safety-first political culture, a bureaucracy in which is it is ‘remarkably cheap’ to introduce new rules and a ‘complete lack of incentives’ to cut red tape.
It recommends that ministers establish a ‘gateway’ requiring that £2 in savings must be found for every £1 in new regulatory costs introduced – and that businesses should be allowed to appeal if official Impact Assessments underestimate the effects of a new rule.
The report has been backed by former Cabinet Secretary Lord Sedwill, who wrote in a foreword: ‘Government adds a safety margin to Parliament’s legislation, regulators add a safety margin to Government’s, compliance teams in the private sector and public service add a safety margin to the regulators.. Big institutions can bear this burden. Small ones find it stifling.’
