Spending and Transformation
Fairness in collecting public money must be matched by astuteness in spending it. Mission-Focused Budgeting connects available funding to prioritised projects in the rolling 15-year plan.
Prime Directive: the transformation of the United Kingdom must be achieved without adding to national debt. Every project must identify funding for implementation and continuing costs.
Committed and Flexible Expenditure
Committed expenditure is tied to existing legal, contractual or operational obligations. Flexible expenditure can be allocated or redirected within the period being considered. Commitments constraining next year’s budget may be changeable over five or fifteen years. Classification must therefore state the time horizon, amounts and consequences of change.
Six mechanisms for funding transformation
These are proposals for evaluation, with no assumed savings attached. Each requires a quantified baseline, responsible Department, implementation timetable and evidence of the net funding available.
| Mechanism | How it can contribute | What must be established |
|---|---|---|
| Reform committed expenditure | Redesign obligations and services, reduce duplication and improve delivery. | Net recurring savings after transition costs; effects on service quality, rights and affected people. |
| Redirect flexible expenditure | Move funding from lower-priority activities to projects offering greater national benefit. | The existing activity forgone, its consequences and when funds can be released. Reallocation creates no additional money. |
| Improve tax collection | Collect more of what is lawfully due through administration, compliance and action against evasion. | Additional receipts after collection costs, realistic recovery rates and timing. |
| Reform the tax system | Examine reliefs, exemptions and collection methods for fairness and effectiveness. | Distributional and behavioural effects. Reform may be revenue-neutral; additional receipts require evidence. |
| Expand productive capacity | Investment, employment and business growth can increase receipts and reduce some benefit expenditure. | Net fiscal effects after public investment and ongoing costs; uncertainty and timing. Shared benefits must be counted once. |
| Manage public assets better | Reduce property costs, improve appropriate rental or commercial income, and dispose of genuinely surplus assets. | Whole-life value, income forgone and disposal costs. One-off sale proceeds cannot sustainably finance recurring expenditure. |
From mechanisms to available funding
The first three mechanisms provide direct starting points. Tax reform, productive growth and asset measures require their own evaluations. Distinguish cash released from improved capacity, and forecasts from funds actually available. The same pound cannot finance a project and reduce borrowing at the same time.
For each proposal, publish gross benefits, implementation and continuing costs, net funding by year, uncertainty ranges and the evidence supporting the estimate. Annual funding must reconcile with the national financial baseline. The PDMA and Minister for Transformation can then schedule approved projects within that constraint.
What Canada contributes
Canada’s 1994–1996 Program Review provides a documented method of challenging existing spending. Departments developed proposals; senior officials and a special Cabinet committee scrutinised them; full Cabinet resolved major issues. Marcel Massé chaired the ministerial committee and Jocelyne Bourgon chaired the senior officials’ committee.
Six tests covered public interest, the need for government involvement, federal versus provincial responsibility, alternative providers, efficiency and affordability. The review base was approximately C$52bn and excluded major statutory programmes. Measures included restructuring, subsidy reductions and commercialisation, as well as defence cuts. These choices must be evaluated against the UK’s own objectives, including Armed Forces expansion.
Canada supports learning from a disciplined review process; it provides no basis for a prescribed ratio of Committed to Flexible Expenditure. Source: Canada School of Public Service: review history, methodology and governance.
The next assessment
- Reconcile expenditure by function to the official total, counting every item once.
- Identify commitments and what can change over one, five and fifteen years.
- Compare alternatives against cost, fairness, service quality and national capability.
- Estimate each funding mechanism’s net contribution, timing and uncertainty.
- Approve and monitor projects against available funding and the debt constraint.
Evidence status: the earlier working papers contain overlapping categories and unsupported savings estimates. Their numerical splits are retired as planning assumptions. This register specifies the work needed to establish achievable funding.
Examine the financial starting point · Government Accountability