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- Public, Wednesday 18 November 2009 08.57 GMT
Public finances will come under greater scutiny in future - from the public. Photgraph: Alamy
Lack of transparency has become the modern stick with which to beat public services. Public managers could hardly fail to be aware, in the light of the fallout from the MPs' expenses scandal, of growing demand for transparency about an ever-wider range of public services.
Recently, for instance, the shadow chancellor George Osborne criticised the Private Finance Initiative on the grounds that it "lacks transparency", while his shadow cabinet colleague, Francis Maude, told the Conservative party conference in September that he wanted not professional managers but the general public to inspect all major public sector spending plans.
"In this new era of transparency," wrote Conservative blogger Tim Montgomerie, "you, I and every person with a computer will be able to become armchair auditors of every state agency."
To this debate now comes an interesting addition: the publication, on Saturday, of a detailed report by the 2020 Public Services Trust thinktank, on the contributions and the benefits from the public purse. The Fiscal Landscape: Understanding contributions and benefits is a fascinating sign of the times, which will have politicians, both national and local, recalibrating the ways in which they address issues of public finance.
This report goes further than any other work in trying to work out who benefits from public spending - and who would be hardest-hit by spending cuts.
Ben Lucas, director of the 2020 Public Services Trust says the lines of sight between money raised and money spent are generally – and often deliberately – obscured and the relationship between social insurance and social benefit has been lost.
"If those on lower incomes benefit most from current tax and spending, will they be hit hardest by cuts?" he asks. "If middle earners have also been net winners, will this be sustainable in the future?"
Lucas argues that, if "citizens can't follow the money, they may not trust politicians who promise that green taxes raised here will be offset by tax reductions there". But he perhaps fails to pay enough attention to why the lines of sight between money raised and money spent have been obscured in the first place.
Spending priorities
No one would take issue with the proposition that we need to know how government money is spent and we need to have an honest, and painful debate about spending priorities. But one of the problems of the "contribution-benefit" analysis is that it encourages a notion of give and take that has dangerous potential to play into vested interests.
One of the reasons that, as Lucas rightly says, there isn't always an obvious link between money raised and money spent, is that such a direct link can lead to questioning, along the lines of what has the government done for us? The NHS, for instance, is not about paying in and getting out, though people sometimes see it in that way; it is a social compact, a settlement on behalf of all.
We can look to other places to see some of the effects of narrowing the debate over paying into a social system and getting something out of it.
Recently, Robert Cruikshank, the public policy director at online network Courage Campaign, wrote about the situation in California.
He noted that the tax revolt of the 1970s in the US state led directly to the crisis over public spending in which it now finds itself. "When the oil crisis and its induced inflation suggested that the suburban version of the dream was unsustainable, large corporations and the white middle class chose to restructure state government to cut off everyone else from public services while preserving their own subsidies," he said.
Transparency in spending taxpayers' money wisely is unarguable; but we need to be careful about how we use that information.
