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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The writer, a Labour and Co-operative party MP, chairs the cross-party public accounts committee in the House of Commons
For more than a decade I’ve had the privilege of scrutinising how government spends taxpayers’ money, examining and questioning those responsible for multibillion-pound projects. I’ve seen many examples of projects gone awry, deadlines shifted and money wasted.
There are many big-ticket items in defence that have gone over cost and over time — the current backlog in defence equipment spending over the next 10 year is at least £17bn. Other projects are frankly ludicrous, such as the airport in St Helena, built in a spot so windy that aircraft could not land and government considered blowing the top off a mountain on the island to create a safer landing strip.
As well as failed projects past, there are many “big nasties” still to tackle — projects delayed or deferred where continued inaction puts the country at risk. These include the school buildings not fit for purpose being used by 700,000 pupils, the seven hospitals built almost entirely from reinforced autoclave aerated concrete (RAAC) that need to be rebuilt by 2030 and the £10.2bn backlog in hospital maintenance.
The UK has not dismantled a single nuclear submarine even though it retired 20 legacy submarines in 1980. And £2.8bn over the next 15 years is needed at the animal health centre in Weybridge, which is critical to preventing and managing diseases that spread from animals to humans. The cost of delaying these is high both in human and cash terms.
As a former government minister, I joined parliament’s public spending watchdog with an understanding of how Whitehall works, how policy is delivered and how to keep things on track. But I have since observed how frequently the same mistakes are made; the system seems to be incapable of developing institutional learning and memory. All too often, we have also seen money misdirected or squandered, not because of corruption, but because of groupthink. This leads to optimism bias, intransigence, inertia and cultures that discourage whistleblowing.
UK government spending is more than £1tn a year, but the scale must never mask the need to look after every penny. We also need better mechanisms to ensure the money goes where it makes the most difference. Spending on public health to save money on acute healthcare is one example. As MP for the London area around a major UK tech hub, I often say we should be a little more Shoreditch and a little less Whitehall — fleet of foot, willing to pivot when necessary, and when things are not working acknowledge it and fail fast.
Good politics means looking 20 years ahead as well as dealing with today’s crisis and next week’s emergency. Party manifestos, in their search for instant electoral wins, can mean that we lose sight of long-term thinking. These challenges should never become mere matters of political controversy, but should be dealt with over decades. I call this “slow politics”. Most large infrastructure and defence programmes fall into this category. Digital transformation in government is another needing consistent funding and protection from departmental budget cuts.
The PAC highlights data gaps in almost every report: changing this could make a huge difference. Just take the example of a prison maintenance contract, based on government data that had undercounted the numbers of toilets and windows. It turns out that toilets and windows get broken more often in prisons than elsewhere and this inaccurate data had a major impact on the ability of the contractor to deliver.
We must make sure we have stress-tested plans. I agree with the Cambridge professor Dennis Grube’s analysis that to deliver policy the “four ducks” — identifying the problem, determining the policy solution, getting the data and telling the story — are important. But even with these, policies are not always effectively delivered. Any incoming government must learn from past failures. Without this, my successors as chair of the PAC will be doomed to investigate a cycle of broken promises and wasted cash in perpetuity.
The PAC has suggested pre-scrutiny of major projects, with the aim of identifying pitfalls before money is wasted. Whitehall has not been keen but the Labour party is promising an Office for Value for Money to put projects under the microscope before the Treasury agrees to fund them.
Whoever forms the next administration faces the most difficult fiscal challenge since the second world war. Governments usually want to be seen to be doing different things. My message is we need to also do things differently to deliver for the taxpayer.