HC Deb 29 April 1986 vol 96 cc371-2W
Mr. Richard Shepherd

asked the Chancellor of the Exchequer if he will publish the results of the multi-departmental review of budgeting in Government Departments; and if he will make a statement.

Mr. MacGregor

Yes. I have today arranged for a copy of the report by the head of the Government accountancy service to be placed in the Library.

Mr. Wilson was asked to examine the way in which managers construct budgets, challenge the budgets put to them, and subsequently monitor actual performance against budget. The purpose was to help Departments to continue their development of budgeting as an effective means of expenditure planning and control and as a tool which management can use to improve the allocation of resources and the delivery of better value for money. This is a vital part of the Government's programme for better financial management in the Civil Service.

The review has confirmed that our financial management initiative was soundly based and is being carried forward. It found evidence of good results in many areas. Civil Service managers are now much more aware of their costs and responsibilities. Managers have responded by taking the initiative to make savings and improve the efficiency and effectiveness of the activities they manage.

There are still gaps in Department's systems and in managers' use of budgeting, but this was not unexpected. The Government knew in 1982 that it would take a long, sustained effort to help managers to run the Civil Service more effectively, and the review points the way forward to a further stage in this programme. It makes recommendations to improve four crucial aspects of budgeting: the responsibility of all managers for setting and reviewing budgets; the links between budgeting and the public expenditure survey in which the Government decide their overall spending plans; the use of output and performance indicators and regular evaluations to measure achievement against objectives; and the identification within senior management structures of clear-cut responsibilities for the control and use of resources.

These recommendations will be the basis for action in each department. Each will apply them to its particular circumstances as it rolls forward plans for better financial management and better value for the taxpayers' money.