A budget challenge

If you worked in the Treasury, which you may do (I do not), what information would you want to make available to those making budgeting decisions? If you were George Osborne (unlikely), what information would you want to have at your fingertips to help you make the choices that will impact the lives of your fellow country men and women? If you were David Cameron (also unlikely) and you were reviewing the draft budget produced by the Treasury - what questions would you ask to ensure that the budget was going to appropriately represent your policies and serve the needs of the country? Now revisit these questions keeping in mind that the budget you are about to make is the most radical and far-reaching budget in recent times.

Clearly much of your focus would need to be on figuring out quite how on earth you were going to balance the books. Having decided on a need to bring down the deficit by a certain amount - you have the final answer. Now all that remains is to figure out how to take the pain.

I've never worked in government, but I have worked in Finance for big business. The closest equivalent to a budget from a business perspective is probably the annual 5 year planning process. I'm sure most large organisations do this to some extent. From my experience it usually involves the central management team (possibly equivalent to David Cameron & team) deciding on some over-arching goals and boundary conditions within the context of the organisation's strategy. Then the individual business areas (say the individual government departments) come up with a financial and operational plan based on those objectives and submit them to the central group. There is then an extremely frustrating but necessary process in which the central group review the data from a variety of perspectives, and a certain amount of iteration is required to adjust before the plan is agreed.

The question in my mind is, what things should the central group (David Cameron and George Osborne and teams) be reviewing when making their decisions to ensure that the answers actually fit with the strategy? Clearly they need to figure out if the numbers add up, they need to figure out if key manifesto pledges have been adhered to, but over and above this - surely there is a set of data which any Prime Minister or Treasurer would want to know, which is how these changes are going to affect their country. How will they affect the poorest in the country? How will they affect the richest? What about families? What about pensioners? What about those with disabilities? What about single parents? What will happen to the income distribution? What will be the impact on business? What about children? What about women? What about men? Will there be a geographical impact?

It may be difficult to accurately calculate all of this - but some level of analysis could surely be done to start to answer these questions. Surely this analysis should not only be produced prior to the decisions being taken (or else what use is it?), but also it should be transparently available to the public who can see for themselves what the government is committing to. Instead, we have a government who proclaims that their spending review is progressive, only to be told by the Institute for Fiscal studies that it will be the poorest who are hardest hit. It requires independent analysis to show that women will be hit disproportionately hard by the budget, even though conducting a gender impact assessment is actually required by law.

To a simple mind, it seems as though there are 2 possible explanations here. First, that the government and treasury do all of this analysis, that the politicians know exactly the impact on their country, and yet they choose not to disclose it (or even worse, blatantly lie about it). Second, that they don't do this analysis, so they don't fully realise the impact of their decisions, and then have to defend it when they realise the truth some weeks later. It may be that the answer lies somewhere in the middle - that the analysis is done but only partially and perhaps not presented particularly well?

None of these explanations is good enough for me. I would like to live in a country where the government makes fully informed decisions, and communicates to me clearly the impact of those decisions. If they are making a decision that means the poorest carry a larger burden, or that women face disproportionately higher cuts, I would like to know that they knew this when making the decision, and that they have a reason for it. I could then weigh up whether or not I agreed with the reason, and my decision to vote for them next time would become clear.

Tomorrow the Fawcett society's legal case against the budget reaches the high court. This will determine whether or not a judicial review of the budget will be granted. Far from being an unnecessary burden on government to review the gender impact of their decisions, I would argue that a transparent impact assessment process for key decisions such as the budget is a necessary tool for any government. Whatever happens tomorrow, I hope that someone in the government thinks so too!