ICAEW and the Fabian Society recently held a joint roundtable event on how a future Labour government can bring a long-term approach to public sector financial management, infrastructure and investment, amidst a challenging position for the public finances.
While the next General Election is not scheduled until 2024, Labour shadow ministers are already starting to think about how they can both deliver on their policy objectives and ensure sustainable public finances at the same time.
As current and previous administrations have discovered, getting the ‘wiring’ of government right is essential to achieving progress and a joint ICAEW-Fabian Society roundtable on 15 July 2021 explored the challenges with members of Labour’s shadow team including Bridget Phillipson, Shadow Chief Secretary to HM Treasury, and policy experts from academia, ICAEW, the Institute for Government and Reform.
The discussion was focused on how to ensure a joined-up, long-termist approach to government, including strategy and foresight, outcomes and delivery, digital, data and service transformation, financial management, audit and procurement, and infrastructure, investment and major projects. The need for a more effective centre of government to drive policy outcomes at the same time as devolving more powers was a key theme, as was the contribution that effective public audit can make to improving the quality of decision making within government.
The challenges facing any future Labour government are exacerbated not only by the huge amounts of borrowing used to finance the UK’s response to COVID-19, but by public finances that were already challenged by the long-term financial consequences for pensions, health care and social care of more people living for longer. Higher gearing in the public balance sheet increases the vulnerability of the public finances to future economic shocks.
Andrew Harrop, General Secretary of the Fabian Society, commented: “The Fabian Society hopes that this early debate on how to bring a long-termist, coordinated perspective to the centre of government will help equip Labour to critique government inaction; and to start to think through ‘how’ as well as ‘what’ the party wants to achieve if it wins back power. Developing plans to reform the centre of government can also help opposition parties demonstrate their credibility, as the Conservatives proved in 2010 with the Office for Budget Responsibility.”
Alison Ring, director for public sector at ICAEW, commented: “ICAEW believes in engaging across the political spectrum on the importance of strong financial management, high quality financial reporting and a comprehensive fiscal strategy to deliver value for money and sustainable public finances over the long-term. We hope that this event will have helped to advance thinking on how to tackle the many significant challenges facing the UK public sector and public finances in uncertain times.”