Gordon Brown today set out plans to cut the cost of the public sector by £12 billion over four years. The Treasury’s “Smarter Government” White Paper envisions a “third generation” of public services delivering more for less. Proposals include cutting the wage bill for senior civil servants, moving more Whitehall staff out of London, postponing the NHS IT system and publishing performance data to drive efficiency. 

The proposals are a welcome step. However, the level of ambition for reform, right across the political spectrum, needs to be higher. Government needs to get to grips with how public money is managed right across the public sector. While there has been some progress in certain areas of government, the overall story is one of national accounts that aren't aligned to budgets, a lack of effective parliamentary scrutiny of public spending and almost no information available - at a programme level - about how much was spent and how well it was spent.

Going further than simple cuts, substantial reform to the structures underpinning public spending is necessary to ensure that government delivers all it can for taxpayers' money. The ICAEW has worked with the Chartered Institute of Public Finance and Accountancy (CIPFA) to put forward some practical suggestions. Our ICAEW Manifesto, Going for Growth, includes several recommendations about how to manage public money better.

As I argued at Reform’s recent conference on this issue, real reform will require transparent information and better scrutiny about what the money is spent on and how well it was spent. We also need to see sustained political commitment behind the Whole of Government Accounts and alignment projects and the transparency they will bring.

I congratulate HM Treasury for setting out a clear direction of travel in the White Paper. More needs to be done if we are to achieve value for taxpayers and effective financial management across government.