Mark Wallace: Transparent public spending

Mark Wallace, Campaign Director of The TaxPayers’ Alliance, welcomes the launch in America of a searchable online database of government spending and George Osborne's endorsement of the idea.

A few days ago USAspending.gov went live, allowing anyone to see exactly where the US Federal Government spends Americans’ tax dollars. Every Federal funding transaction is published on the web site, and details of the agencies who agree the spending, the reasons for the transactions and the recipients are all published on an easy to search database.

The idea, welcomed by George Osborne when the Bill establishing the database was passed last year, is one that can only improve the efficiency and accountability of the bodies spending taxpayers’ money. It is an example Britain would do well to follow.

Accountability should be a fundamental principle of the way Government is structured. On principle, if the taxpayer is to be forced to cough up every time they earn, spend, save or invest, the least we should receive in return is the right to see where the money is going.

In practice, scrutiny is a positive force for good in the public sector. Having the watchful eye of the public and the media focussed on public transactions would force officials and politicians to exert themselves more to get a good deal and to do what the public want. If the public sector is to be exempt from the impetus of competition, we need to make sure there are other pressures to encourage high performance, good results and value for money. Public scrutiny is just such a pressure, and it is currently sorely lacking.

We need to change the whole balance of secrecy and accountability in the public sector.

At the moment, the default policy is one of secrecy – unless something is specifically legislated to be published, or requested under Freedom of Information (FoI), it remains secret and unknown to the public who finance it.

Behind closed doors the dodgy deals, poorly negotiated contracts, bungled jobs and unpopular initiatives that currently bedevil the public sector are safe to continue, exposed only if a well-aimed or lucky FoI request happens to unearth them. 

The Freedom of Information Act has made the situation a bit better, and has shifted the balance of power at least a bit. You only need to look at the proportion of newspaper articles that are now based on information gleaned through the Act to see that it is making an impact. Even with FoI, unearthing public expenditure data remains a time-consuming activity at best and a pot shot hunting tool at worst. The discomfort such openness has generated for the Government can be seen in Labour’s recent attempts to back-pedal and make information unfree again – it is, however, rather difficult to put the genie back in the bottle.

Given Labour’s back-pedaling, it would have been very easy for the Conservatives to conclude that introducing more openness would be making a rod for their own back, so the Shadow Treasury team should be congratulated for advocating more transparency, and putting the interests of taxpayer above short-term political self-interest.

The TaxPayers’ Alliance is making use of FoI requests to research public sector spending on an unprecedented scale – for example in our new Council Spending Uncovered Series, the first of which was published recently – which produces very useful results, but the public information culture must change still further.

For a start, it is simply not practical for many ordinary taxpayers to submit the 450+ FoIs needed to build a useful picture of local council spending, or the requests it would take to investigate NHS Trusts on a national scale. 

Our researchers at the TPA do large scale FoI work in order to make all of this information easily accessible to the public, but it is a sad indictment of our public sector culture that we need to do this work at all. How much better it would be to have these details published automatically every year, for all to see. 

The default position for our data (and it does belong to us, remember that we are the public sector’s shareholders, financiers and customers) should be out in public view. Secret information should no longer be the norm, but should be the exception, with protection only given to personal data or facts pertaining to national security.

Such moves are growing in popularity. USAspending.gov is not the only service of its kind in the US – several States, including Kentucky, Michigan, Oregon, South Carolina, Vermont and West Virginia – publish all public employees’ salaries on the internet for taxpayers’ perusal. Missouri will launch a similar web site in 2008.

In Britain, hopefully George Osborne will press further for a UK equivalent of USAspending.gov, following on his previous support by using the website as an example of the principle put into useful, accessible practice. Similar rumblings can be heard coming from Lib Dem benches, too, with Norman Baker MP today proposing a Bill that would lay bare quangos’ expenses. 

In a time of inefficient government, high taxes, struggling services, poor turnout and public disillusionment, transparency offers great things for all of us - taxpayer, service user and politician alike. Let’s open the windows of the public sector and let in some light.