Spending Review Framework

(8 June 2010)

This briefing aims to inform readers on the content of the recent Spending Review Framework.

The Spending Review Framework gives greater detail of the Coalition Government’s proposals to cut the public deficit.

Under the framework, all government departments will be required to assess current contracts and programmes on the basis of value-for-money and identify any potential savings. Part of this will be the attempt to encourage a greater range of service providers.

The following questions are to be asked about public spending:

Can the activity be provided by a non-state provider or by citizens, wholly or in partnership?
Can non-state providers be paid to carry out the activity according to the results they achieve?
Can local bodies as opposed to central government provide the activity?

These questions carry forth the commitment for increased local and voluntary provision of services and a payment by results model for public services. However, it should be noted that a lot of such non-state provision would include the private sector funding state capital spend (such as property and machinery), and may also entail increased sub-contracting arrangements between the private and voluntary sector.

The framework also states that there is ‘no justification for spending public money on programmes and projects without considering the impact on the outcomes that people care about.’ This could be a potential point for voluntary organisations to pick up on, as delivering quality outcomes and high-levels user satisfaction is something that the voluntary sector is seen to contribute to service delivery.

A Public Expenditure Committee is to be formed to advise the cabinet on the Spending Review, agreeing on key priorities and assessing the impact of reduced spending on various parts of society. This Committee will include the Cabinet Office ministers Francis Maude and Oliver Letwin. Given the position of all things voluntary sector within the Cabinet Office, this means that Letwin and Maude are likely to be more attuned to the issues affecting the voluntary sector when deciding upon spending priorities.

Finally, the framework promises a period of external engagement with the voluntary sector, the private sector and key experts over August 2010. This will take the form of a series of events to discuss and debate various aspects of public spending, covering the following themes:

The role of localism and how it can meet the Government’s vision to distribute power and opportunity more widely.
Major areas of departmental expenditure
The broader welfare reform strategy

The Review states that “A range of people will be invited to these events, to make sure that they represent a wide spectrum of expertise and viewpoints. Invitees will include members of think tanks and interested groups, academics, representatives of local government, business and trade unions, and public sector experts and watchdogs such as the Audit Commission.”

The written commitment to hold external engagement events over a specified timescale makes it difficult to be overly cynical about the Coalition’s intent to involve the public in discussions around reducing the budget deficit. However, the list of invitees seems to focus on academic and public sector experts at the expense of representatives of the local voluntary sector.

To ensure cuts which are genuinely informed by democratic discussion it will be vital that such talks take place with as a broad a representation of civil society as possible and that the voluntary sector is able to effectively feed in on how the cuts will impact upon the communities and people it serves.

To achieve this, Skills-Third Sector may play a key role in collating robust research data about the sector to be brought forward into the external engagement process by voluntary organisations.

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