A world-first focus on long-term outcomes could transform UK government – or create new spending fights
Tucked away in John Healey’s budget is decision to ringfence preventative projects where future savings outweigh initial cost It merited the briefest of mentions in John Healey’s speech and just one paragraph in the 166-page budget document , but some believe it could revolutionise not just public spending but the very process of government itself: a new focus on long-term outcomes. The idea in…
In the 166-page budget document penned by John Healey, a decision to "ringfence preventative projects" where future savings outweigh initial costs has been revealed. Though this point was only briefly mentioned in Healey's speech, it has the potential to revolutionise not only public spending but also the entire process of governance.
The concept is straightforward: any spending deemed "preventative" – i.e., where the initial outlay will be more than compensated by future savings – will be protected from being plundered for immediate needs. This move comes in the wake of years where long-term spending was often raided to meet day-to-day financial requirements, particularly after the austerity measures of the 2010 coalition government.
The new system, dubbed the Preventative Departmental Expenditure Limit, or PDEL, will come into effect from the upcoming spending review that starts next year. Stuart Hoddinott of the Institute for Government thinks this could be a significant shift in how the government handles spending reviews and the overall spending framework.
However, the specifics of what qualifies as a PDEL project remain unclear, as departments await guidance from the Treasury. One example cited is initiatives aimed at reducing rough sleeping, while other potential areas include public health programmes and early years schemes similar to Sure Start. The decision has sparked debate, with some arguing it could lead to a new round of spending tussles between departments and the Treasury, as ministries seek to protect their preferred projects.
Yet, perhaps more importantly, it symbolises a shift towards a broader focus on long-term outcomes, with the aim to address issues that have enduring costs and repercussions, such as rough sleeping and adult social care. The government's intent is to combat the practice of raiding such budgets to fund short-term measures, as part of a broader strategy to transform the way the state operates.
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