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Treasury Control: The Coordination of Financial Policy in Great Britain
Published online by Cambridge University Press: 02 September 2013
Extract
Any account of British government will lay stress on the power and importance of the Treasury. But although the parliamentary side of British finance has been fully described in various works, very little has been written about what goes on in this field within the administration and in particular about the operations of the Treasury. What precisely does the Treasury do and how does it do it?
The typical business of the Treasury is the control of certain activities of other departments. It is, in the words of one of its former high officials, “the traditional coordinating department.” That does not mean that the Treasury coördinates the whole of Government policy. No single staff agency in British administration can claim so large a duty, unless we take in earnest those civil servants who lump together as one entity the Treasury, the Lord President's Office, and the Cabinet Office under the irreverent title of “The Great George Street Front.” Through the Treasury, however, various large aspects of policy are concerted and controlled, and by a study of its operations we may get some idea of how the business of coördination is carried on under Britain's peculiar plural executive.
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- Research Article
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- Copyright © American Political Science Association 1955
References
1 Hawtrey, R. G., The Exchequer and the Control of Expenditure (London, 1921), pp. 28–29Google Scholar.
2 Not only are the Supply divisions kept informed of general economic and financial policy, but also very recently they have been given the task of criticizing investment programs in the public sector of the economy, a duty formerly performed in the Economic Affairs side of the Treasury. This has meant that a principal aspect of economic coordination—the control of public investment—has been tied in more closely with the traditional work of financial control. Approval of investment programs on the official level is now given by the same persons who grant financial approval.
3 Outside the Treasury, but closely related to it, are other arrangements designed to promote economy. By a major reform of the interwar years, the Permanent Secretary of each department was made also its Accounting Officer. It is he, therefore, who answers for the department before the Public Accounts Committee and on him at the official level rests the undivided responsibility for both policy and the financial results of policy. A further barrier to extravagance is the annual audit of appropriation accounts, which is concerned with economy as well as regularity and which, although performed in the name of the House of Commons, is so tied in with the Treasury as to bolster its housekeeping control. Economy is also a main concern of the House of Commons Select Committee on Estimates, which after a record of only modest achievement in earlier years has recently earned a very considerable reputation. See Chubb, Basil, The Control of Public Expenditure: Financial Committees of the House of Commons (Oxford, 1952)Google Scholar.
4 Sect. 1 (3), c. 52, 11 and 12 Geo. 5, The Statutes, Third Revised Edition, Vol. XVI, 1918–1921 (London, 1950)Google Scholar. The original language of the Act of 1866, which is not materially different, can be found in The Statutes of the United Kingdom of Great Britain and Ireland, ed. Rickards, George Kettilby (London, 1866), Vol. 27, pp. 424 ff.Google Scholar
5 Epitome of the Reports from the Committees of Public Accounts, 1857–1937 (Parliamentary Papers, 1937–1938, Vol. 22), pp. 20–21Google Scholar.
6 Epitome (Treasury Minute, 8 December 1914, par. 7), p. 565Google Scholar.
7 SirJennings, W. Ivor, Cabinet Government, 2nd ed. (Cambridge [Eng.], 1951), pp. 139, 228–29Google Scholar.
8 In the United States there is of course a good deal of informal consultation throughout the year between the Budget Bureau and departments. Like the process of granting prior approval in Britain these consultations greatly facilitate the annual review of estimates. The important difference, however, needs to be emphasized. Informal as the consultations may be which lead to prior approval in Britain, it is of the essence that they culminate in a formal sanction, a letter stating that approval has been given, which the Comptroller and Auditor General under the terms of the Act of 1866 will require the department to possess.
9 H. C. Deb., 5th ser., vol. 472, cols. 916 ff. (14 March 1950).
10 H. C. Deb., 5th ser., vol. 493, col. 202 (7 Nov. 1951).
11 Each estimate is divided into three parts: Part I, which alone is reproduced in the Appropriation Act, provides the statutory description of the purpose for which the supply requested in the estimates is ultimately granted. Part II shows the subheads under which the Treasury, acting under Section 23 of the Exchequer and Audit Departments Act, 1866, requires departments to account for expenditure. Part III gives further details for the information of Parliament.
12 Pp. 620 ff. Epitome, Treasury Minute 24 November 1921 on 3rd Report, PAC, 1921 (H. C. 212).
13 Rule XXI, cl. 2, Rules of the House of Representatives.
14 For discussion of this whole question, see: Epitome (1857–1937), pp. 85, 264, 468, 724Google Scholar; PAC, 1912, Evidence, Q. 3427–42; and esp. PAC, 2nd Report, 1932, par. 3, and Evidence, Q. 840–1, 853; also May, Erskine, Parliamentary Practice, 15th ed., p. 726Google Scholar. The question raises the problem of the limits of the prerogative. To that power it seems the Treasury representative was referring in an interesting passage at arms with the Comptroller and Auditor General before the Public Accounts Committee in 1932. While granting that “constitutional principle” required that the Executive must not so commit Parliament to future expenditure as, in effect, to force it to appropriate funds in the future for services without statutory sanction, the Treasury representative insisted that an exception to that principle is “the law that the King's Government must be carried on,” which he took to mean not only that the fighting services might incur liabilities for services without statutory sanction, but also that to some undefined extent the same power was held by the executive in providing civil services. (Q. 841).
15 H. C. Deb. 5th ser., vol. 516, col. 1898 (24 June 1953).
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