The recent financial crisis has significantly raised the profile of parliamentary financial scrutiny and raised public expectations about financial accountability.
Each year, the British Parliament authorises about £600bn of public expenditure and the taxes that fund that expenditure. However, Parliament has routinely proved ineffective in scrutinising the Government’s spending plans and priorities.
This is not entirely the fault of parliamentarians, however, since the system appears designed to make things difficult for them.
MPs are presented with a bewildering array of procedures and financial documents that finance professionals would find difficult to understand, let alone multi-tasking law-makers.
Besides, MPs see little point in getting involved in the technical detail of finance packages that they will have little chance of influencing; the outcome has already been determined by Government. As the Hansard Society has noted: 'To draw an analogy, the Government decides the value of the cheque, to whom it should be paid and when, and Parliament simply signs it.'
There have been some positive reforms. Specialised Select Committees were introduced in 1979 and, since then, these committees have had increasing amounts of technical advice and support.
However, every positive step towards effective financial scrutiny falls short. The introduction in 2002 of a specialised Scrutiny Unit for financial matters was a welcome addition, but recommendations from the Hansard Society in 2005 to extend its role were not followed up.
Additionally, the composition of Select Committees does not pre-dispose them to effective monitoring of the executive; those meant to be monitoring the executive are selected by the executive.
Even when a Select Committee is able to produce a good report on the Government’s financial plans, the time constraints of Parliament ensure that there are few opportunities to follow up on such reports, or to debate them thoroughly.
If financial scrutiny is to improve, changes need to be made.
Expert scrutiny should be stepped up. The scrutiny unit should be expanded and strengthened, while training and support on financial issues should be offered to MPs on Select Committees. Committees should identify time and opportunities to systematically follow up on their reports.
Ideally, Parliament must increase its impact on the budget process. A root and branch review is required, otherwise we will continue with a model of financial scrutiny, which is virtually non-existent.
Financial scrutiny must be central to accountability.
Each year, the British Parliament authorises about £600bn of public expenditure and the taxes that fund that expenditure. However, Parliament has routinely proved ineffective in scrutinising the Government’s spending plans and priorities.
This is not entirely the fault of parliamentarians, however, since the system appears designed to make things difficult for them.
MPs are presented with a bewildering array of procedures and financial documents that finance professionals would find difficult to understand, let alone multi-tasking law-makers.
Besides, MPs see little point in getting involved in the technical detail of finance packages that they will have little chance of influencing; the outcome has already been determined by Government. As the Hansard Society has noted: 'To draw an analogy, the Government decides the value of the cheque, to whom it should be paid and when, and Parliament simply signs it.'
There have been some positive reforms. Specialised Select Committees were introduced in 1979 and, since then, these committees have had increasing amounts of technical advice and support.
However, every positive step towards effective financial scrutiny falls short. The introduction in 2002 of a specialised Scrutiny Unit for financial matters was a welcome addition, but recommendations from the Hansard Society in 2005 to extend its role were not followed up.
Additionally, the composition of Select Committees does not pre-dispose them to effective monitoring of the executive; those meant to be monitoring the executive are selected by the executive.
Even when a Select Committee is able to produce a good report on the Government’s financial plans, the time constraints of Parliament ensure that there are few opportunities to follow up on such reports, or to debate them thoroughly.
If financial scrutiny is to improve, changes need to be made.
Expert scrutiny should be stepped up. The scrutiny unit should be expanded and strengthened, while training and support on financial issues should be offered to MPs on Select Committees. Committees should identify time and opportunities to systematically follow up on their reports.
Ideally, Parliament must increase its impact on the budget process. A root and branch review is required, otherwise we will continue with a model of financial scrutiny, which is virtually non-existent.
Financial scrutiny must be central to accountability.
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