A new Coalition Government is now facing some of the most significant public finance challenges of postwar Britain. The challenges are immense: the medium-term challenge of how to rebalance the nation’s books over the next three to four years must be squared with the long term challenge of ensuring Britain’s public finances can cope with demographic and social challenges, such as those posed by an ageing society.

For the first time in years, a new government will have to carve out a programme of public service reform in a context of constraint rather than historic investment. The Public Finance Programme will investigate how the radical fiscal action needed to rebalance the budget can be undertaken without damaging progressive goals and the core functions of the state, as well as the long-term future of our public services.

 

We are considering the following key questions:

·      What scope is there to raise extra revenue in a fair and efficient way?

·      How is public money best spent in trying to achieve the ends of the state?

·      How much can be achieved by doing ‘more for less’? What can be achieved through ‘traditional’ efficiency savings to IT, procurement and back-office functions? What can be achieved through longer-term improvements to efficiency through reforms such as a greater focus on prevention in public services and personalisation?

·      How will need to be achieved by ‘doing less’ – for example, cutting programmes and particular areas of expenditure? What framework should be used to prioritise various areas of state spend?

·      How can we balance the short to medium term cuts that need to be made in public expenditure with the long term sustainability of public services?

·      How can we improve public accountability around resourcing decisions at every level of government?

 

The work of the programme will be structured around three themes:

 

1. Policy-specific themes, focusing on spending on welfare and pensions; health; education; crime and policing; and taxation.

2. Cross-cutting themes, including the role of the big society in deficit reduction; the public value of markets; charging for public services.

3. Machinery of government themes, including reform of the Treasury and local government reform

 

The programme team includes Claudia Wood, Head of the Public Finance Programme and Kitty Ussher. It will be informed by an advisory board, including:

 

• ·      Paul Johnson, former head of microeconomics at the Treasury
• ·      Professor Tony Travers, LSE
• ·      Professor Julian Le Grand, LSE
• ·      Professor Alison Wolf
• ·      Carl Emmerson, IFS
• ·      Diane Coyle
• ·      Rachel Reeves MP
• ·      Claire Perry MP

 

 

The programme will draw together politicians, advisers and experts to discuss and debate newly-commissioned research and modelling. It will result in a series of outputs times to inform key government decisions and processes, such as the spending review in autumn 2010.

 

For further information, please contact Claudia Wood, Head of the Public Finance Programme.