How effectively does the government control its spending?

16 July 2018

Governments are responsible for spending huge amounts of public money. Effective control of that spending is essential if governments are to meet their fiscal objectives, deliver their desired policy outcomes, and achieve value for money for the taxpayer.

A new IFS report, published today as part of a wider study of the history of public expenditure control funded by the Nuffield Foundation, uses more than twenty years of data to analyse the planning and control of public expenditure between 1993 and 2015.

This period includes times of public expenditure restraint (the 1990s and 2010s) and of increased spending (between 2000 and 2010). It also includes periods of single-party and coalition governments, changing macroeconomic conditions, and numerous reforms to the framework for planning and controlling public spending. Over these different periods with different contexts, rules and measurements, on the whole, spending has been controlled quite effectively – in the sense that spending has not tended to turn out too differently to final plans. There are clearly strong incentives for departments not to overspend. Even in the face of deep budget cuts since 2010, departments have continued to underspend by a considerable amount. The IFS analysis suggests, however, that this is far from the whole story.

Read the full Observation on the IFS website >>

More about this project >>