Treasury minister Darren Jones signalled further cuts as he told government departments they must meet the minimum 5 per cent savings target required before they will receive any fresh funding.
Giving a speech at the Institute for Government’s (IfG) annual conference on Tuesday, which saw him put his Cabinet colleagues on notice over their department’s budgets, the chief secretary to the Treasury warned that Britain is “long overdue a reckoning with government spending”.
Mr Jones is leading Labour’s spending review, which will determine how much money departments will get over the coming years. He has said he will adopt a “zero-based” approach that requires every pound the government spends to be fully justified.
“As a moderniser with an optimism about the future for Britain, I just do not accept the idea that we should just keep spending more and more money for continued poor outcomes”, the Mr Jones said.
“Taxpayers and the users of public services obviously deserve better. We therefore won’t settle for doing things the same and hoping for a different result, we have to do things differently, and we will.
“That is why funding from the Treasury to support new priorities will only be made available to departments that have first fulfilled the requirements of our zero-based review and met the minimum 5 per cent savings and efficiency target required in this spending review process.”
Rachel Reeves this week told MPs said she expects to reveal multi-year spending plans for government departments in June. It comes after the Treasury previously acknowledged that the 5 per cent savings target will mean difficult decisions.
The spending review follows criticism of the previous government, with Labour accusing the Conservatives of wasting taxpayers’ money and leaving a £22bn “black hole” in last year’s budget – something the opposition denies.
Mr Jones also used his IfG address to outline plans to change the process of the spending review itself, saying he will move it from an analog process - involving “letterheads and excel spreadsheets” - to “shared digital dashboards”.
The government will use artifical intelligence to “forecast the preventative benefits of policies”, he said, saying ministers will for the first time be asked to “look at the long term wellbeing impacts” of departmental spending.
“By putting data at the heart of this spending review, we’ll be able to properly link choices about what outcomes we are buying for each pound, understand how spending on housing, transport or education can work together to drive growth in a particular place and root out spending that isn’t directly contributing to the priorities of this government.”
