Bacon Richard - Conundrum

Even in the scarcest times, public money may always be found tobe employed foolishly.

Alessandro Manzoni, The Betrothed

I t is always sensible to make the most of what you have. This simple principle is honoured by most of the worlds major religions. It is the basis of economics, the study of matching scarce resources with competing and potentially limitless wants. And it should be the foundation stone for governments, which spend other peoples money rather than their own.

Yet our governments do not make the most of what they have. They often spend precious taxpayers money wastefully and even stupidly. They hire as civil servants some of the brightest people in the country and then employ them in ways that stifle their creativity and inhibit them from taking personal responsibility for what they do at work. And they often change the ministers who are the temporary political heads of government departments with such bewildering speed that it is all but impossible for those ministers, even the highly talented ones, to obtain a sufficient grasp of what they are doing before being moved on.

One of the central features of our government is how much money it spends. Currently this is around 673 billion per year. Such a number defies our sense of scale but it amounts to nearly 11,000 each year for every single person in the UK. There is a further 18,000 per person of accumulated national debt. The national finances are unsustainable and public spending is now being curtailed in many areas, although total government spending will still be higher at the end of the current spending period in 2015 at around 744 billion than at the beginning; in effect, it is the rate of growth that is being slowed. The money pays for schools and teachers; for hospitals, doctors, nurses and prescription drugs to treat patients; for pensions; for welfare benefits for those who dont have a job; for building and maintaining our roads; for tax collectors to keep the money coming in; for social workers to help people in difficulty; for police officers to catch criminals, courts to prosecute them and prisons to incarcerate them; for our armed forces and their equipment, from frigates and helicopters to missiles and body armour; for collecting the rubbish; for public libraries; for meals on wheels; for firefighters and ambulance drivers; for the planning system; and much, much more, including the huge interest payments on our debts.

In this book we examine a wide variety of cases where many hundreds of millions of pounds of taxpayers money and in some cases many billions were spent on projects and programmes that went wrong and, in particular, those cases where individual members of the public suffered as a result. By doing this we hope to learn more about why things go wrong and how they should be done instead. Our study draws deeply on the work of Britains public spending watchdog, the National Audit Office often known simply as the NAO and also the Public Accounts Committee, through which the NAO reports to Parliament. We also make use of the work of other commentators and other parliamentary select committees. The Public Accounts Committee or PAC, as it is commonly called, was set up by William Gladstone in 1861 after agitation by the Treasury, which had failed for years to get a proper handle on inflated bills for running the Royal Navy. The main work of the committee was to examine the accounts of government departments and then report to Parliament. In the last 150 years there have been numerous changes to the system of auditing and scrutinising public money, most notably the replacement of the Treasurys internal Exchequer and Audit Department in 1983 by the National Audit Office. Over the last thirty years, the NAO has established a reputation as one of the leading supreme audit institutions in the world. Better resourced and more independent than its predecessor, it is now the auditor for all central government departments and agencies, as well as a wide range of other public bodies. In addition to auditing the financial accounts, the NAO also produces a wide range of value-for-money studies, reporting to Parliament independently on how wisely the government is spending public money. It is mainly these value-for-money studies that interest us.