My post for the SPERI blog (28 January 2014) responding to the government’s proposal to appoint a Chief Financial Officer. I argued this was little more than a symbolic gesture, designed to further undermine the role of elected politicians in democratic decision-making.
Apparently, nobody is in charge of the financial affairs of the UK government. This is an institution responsible for a national debt of over a trillion pounds, that owns the world’s fourth biggest direct employer (the NHS), has spent hundreds of billions bailing out the banking industry, and is currently implementing an austerity programme dependant on making significant reductions in public expenditure. Yet, if we are to believe coalition ministers, no-one is currently watching over the money.
Until, now, that is. Because the government is planning to rectify this dangerous omission with the appointment of a new director general for spending and finance, or a private sector-style ‘chief financial officer’ (CFO), as the position has been dubbed.
This reform is both less significant and more significant than it appears to be. Less, because it will do little to add to the already extensive financial expertise within Whitehall. More, because it represents another step in the government’s attempt to denigrate the very idea of power being exercised by elected politicians, by ‘depoliticising’ policy-making.
Depoliticisation has been a feature of British statecraft since the late-1970s. It is noticeable, mainly, in attempts to remove mechanisms of economic policy from the realm of formal political contestation, rendering them as issue-areas in which decisions require technical expertise (often in neoclassical economics) rather than democratic accountability. The outcome, intended or otherwise, is a constrained set of policy choices – invariably, ruling out options that would challenge established interests.
The Treasury has a history of depoliticising its own functions by handing them over to outside bodies. Gordon Brown did it as Chancellor in 1997, when he gave the Bank of England’s Monetary Policy Committee (MPC) thepower to set interest rates. George Osborne made a similar move in 2010 when he established the Office for Budget Responsibility (OBR) as the lead agency responsible for economic and fiscal forecasting.
These examples reveal a fundamental feature of depoliticisation: that it is a highly political process. Both Brown in 1997 and Osborne and 2010 were looking for political gain, seeking to boost their credibility and their radical credentials. Furthermore, neither the MPC nor the OBR can be considered independent from politics. Both have been set objectives reflecting the (neo-liberal) ideologies of their political masters: the MPC has its narrow pursuit of an inflation target, and the OBR acts as a constraint on fiscal expansion. The patronage powers enjoyed by the Chancellor over both bodies means he has greater control over the appointment of key decision-makers, in contrast to when Treasury civil servants were responsible for policy advice.
This effort to depoliticise can be seen in other areas of Whitehall, too. There is the ever-increasing use of policy tsars – independent, non-political experts brought in to government to lead or recommend reforms in specific policy areas. Under the coalition, there have been over 30 tsar appointments per year. In some cases these appointees head full-blown commissions. For instance, Howard Davies’ Airports Commission has recently announced a shortlist of options for airport expansion in the South East. While the commission is presented as a body providing expert advice to ministers, its entire construction (membership, remit and timing) seems designed to allow ministers to make a decision – the expansion of airport capacity for London – that is in keeping with their ideological beliefs but opposed by the public.
The recruitment of a CFO for Whitehall is part of this trend because of the symbolic value of the reform. The change itself is not very significant. The Treasury already has civil servants performing the same functions: the Head of the Government Finance Profession, a Director General of Public Spending (these two positions will be merged into the new CFO role) and a less senior role, the Treasury Officer of Accounts. Not to mention the Chancellor himself: if George Osborne is not already the government’s CFO, we can only guess what he thinks his job is.
Yet the presentation of the change implies much more. We saw this is in the way the announcement was made. The internal review recommending this change made other, more significant proposals, but the CFO idea was the one highlighted by the government. The very designation of the new role as a ‘CFO’ was a deliberate piece of messaging, implying that the government was aiming to be more ‘business-like’ in its approach. From within government, we hear there is a strong possibility that the job will be given to an executive from a FTSE 100 company.
On this latter point, we have to question the wisdom of assuming someone from a corporate giant can solve Whitehall’s financial problems. As Colin Talbot has pointed out, no private company rivals the complexity of government. And even putting this to one side, which FTSE 100 firms do we want to learn from? Serco and G4S, the outsourcing giants currently under criminal investigation by the Serious Fraud Office? Sports Direct, champion of the zero-hours contract? Centrica and SSE, members of the Big 6 energy suppliers famed for their above-inflation price rises? RBS and Lloyds, banks the taxpayer had to bail out after they went bust? HSBC and Barclays, implicated in scandals around fixing the Libor rate and money laundering?
None of this is to say, of course, that government finances could not be better managed or that private sector experience is not valuable in Whitehall. But we need to consider the deliberate, symbolic way this minor reform has been designed and presented. The purpose seems clear, and it is one familiar to neo-liberal politics: to send out a powerful message that our elected representatives cannot be trusted with matters of such huge import, and we can rely only on the unrivalled expertise of the private sector.
Image: Liberal Democrats