'New radicals': Barclay reveals what Treasury will get and give in Spending Review

Chief secretary reveals a civil servant found £1.3bn in savings as he sets out plans for better use of data
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By Richard Johnstone

29 Jul 2020

Chief secretary to the Treasury Steven Barclay has set out his priorities for the forthcoming Spending Review as he said the he wanted the department to become an accelerator of reform.

In a speech yesterday, Barclay said the Treasury should be "the new radicals" in government, creating a faster and smarter culture and driving sector reforms including a greater focus on outcomes, increased speed of delivery, and improved used of data.

Speaking to centre-right think tank Onward, Barclay said: “a Spending Review is a significant moment in the lifecycle of any government”. He said this year’s would be conducted “against the backdrop of the most challenging peacetime economic circumstances in living memory”.

He reiterated the priorities set out in a letter sent by chancellor Rishi Sunak last week: accelerating the UK’s economic recovery, levelling up opportunity throughout our country, improving public services, and making the UK a scientific superpower.

To achieve these, the Treasury would focus on three areas, he said: improved linking of spending to outcomes, greater speed in project delivery, and better use of data.

Barclay said: “Instead of being seen as a brake on progress, I want the Treasury to put its foot on the accelerator [and] to move beyond a simple yes/no approach to public spending, and instead bring together people, ideas, and best practice from inside and outside government.”

The spending round would be “an opportunity for the Treasury to capture the ‘can-do’ attitude shown by civil servants during the Covid pandemic and make it permanent” and “to be the new radicals, leading change across government”.

He added: “Done well, we can move on from an era of spreadsheets. We can create a smarter and faster culture in Whitehall. And we can ensure that Britain does indeed bounce back from this crisis stronger and better than before.”

Outcomes, speed and data

Barclay said he would aim to tie expenditure and performance far more closely in this spending round, so the Treasury can “have clearer sight of both the intended outcomes and subsequently evaluation of their delivery”.

The government will publish details on outcomes at the Spending Review, which Barclay said would set priorities across government for the remainder of this parliament.

The priorities will also include an effort to better integrate policy development and delivery. Barclay said the government would learn from the Shared Outcomes Fund announced at the last one-year Spending Round to test innovative ways of bringing together the public sector.

These projects, the first round of which Barclay approved yesterday, will test approaches to better integrate services. Examples include better tackling of drug misuse by joining up local law enforcement agencies, healthcare and prisons, to supporting GPs to refer patients to outdoor activities in their local community to help manage complex health and social challenges, like mental health and loneliness.

“While the various pilot schemes may seem eclectic, the one thing each successful bid has in common is that each is backed by a robust method to track and measure the delivery of outcomes,” he said. “I’m hoping we can learn from the success of these projects. Indeed, we can learn from them even if they’re not successful, because we’ll have better data to understand why.”

Alongside this, he confirmed that government efforts to quicken the delivery of major projects, named Project Speed, would also be a key pillar of the review.

He highlighted that the government’s coronavirus response, including HMRC’s development of the furlough scheme and the business department’s Coronavirus Business Interruption Loan Scheme “shows government can adapt and deliver schemes that work at speed”.

He highlighted: “The furlough scheme was announced by the chancellor on 20 March and opened for applications just one month to the day later. Likewise, the Self Employment Income Support Scheme opened almost a whole month ahead of schedule.

“Normally such schemes take months – years even – to deliver, and HMRC achieved this with more than 80% of their staff working from home. I’d like to put on record my thanks to the civil servants in the Treasury, HMRC and elsewhere for the speed and focus with which they have tackled these extraordinary challenges.

“But if the wheels of government can be made to spin this fast in a crisis, with all the added pressures of lockdown, why can’t it happen routinely? For example, why did it have to take a pandemic to collect the right information to understand who the most clinically vulnerable people in our society are? Indeed, would we have been able to collate the necessary data without the backdrop of a health emergency?”

This is why data would be his third area of focus, he said, adding that it had been difficult to learn from previous reviews due to poor recordkeeping and information.

“This is my first Spending Review [and] I’m keen to learn from the past experience of my predecessors. But there is limited data available from previous spending rounds to use to provide useful insights.”

He said this was because evaluation was “too often insufficiently prioritised by departments”, but wanted to make the spending review an iterative process, not a standalone event.

He highlighted one example, where a enterprising civil servant found over £1bn of savings that were hidden in poor data.

“I recently heard an example here from last year’s spending review, where a department had failed to provide standardised and comparable datasets to the relevant spending team in the Treasury.

“In response, a member of our Treasury team who happens to be a gifted coder took it upon himself to quickly code a solution that harmonised the data sets. As a result, his team identified savings of £1.3bn.”

While Barclay said “that’s great to see”, he said “it shouldn’t rely on the initiative of one individual”.

He added: “This approach should be the norm. Work has already begun to incentivise departments and importantly, arm’s length bodies, to supply higher quality standardised data and to support the Treasury to better interrogate this data.”

The Treasury itself also needs to think differently about its relationship to data, he added, for example in civil service pay proposals.

“Bringing together different datasets covering pay, pensions, and property can help determine future civil service workforce requirements, including which jobs we can move out of London.”

He revealed he had established a small team of analysts and developers “to provide more data science expertise and bring agile product practices to the Treasury both in the lead up to the Spending Review, and beyond.”

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