Labour vows to let National Audit Office scrutinise state spending

Anneliese Dodds will pledge on Wednesday that a future Labour government would give a cast-iron guarantee of value for money to voters by insisting on outside scrutiny of the effectiveness of its spending.

The shadow chancellor will use the prestigious Mais lecture to commit a future Keir Starmer-led administration to outside scrutiny by the National Audit Office (NAO) as part of an attempt to rebuild trust with voters who deserted the party at the 2019 election.

Dodds will highlight the money wasted by the UK government on major projects over the past decade, with a particular focus on the spending during the Covid-19 pandemic, such as the £22bn projected cost of the test, trace and isolate programme.

The government is on course to borrow about £400bn this year and while Labour has backed emergency measures to support the economy through its deepest recession in three centuries Dodds said a responsible approach to the public finances must include weighing up the quality and effectiveness of public spending.

“Too often this is left out of the conversation altogether, leading to a situation where poor investment decisions are made and not subject to rigorous evaluation,” she will say.

As chancellor, Dodds would invite the Comptroller and Auditor General to submit an annual report to parliament, bringing together the NAO’s findings throughout the year into a single assessment of the effectiveness of public spending in those areas the NAO had examined.

“I would commit to government responding to that report – and indeed all NAO recommendations – with clear, tangible commitments to improve the quality of public spend. And I would ensure that at each year’s budget the government would set out its own assessment of the effectiveness of public spending, open to external challenge and scrutiny.

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“This approach – hardwiring value for money and financial control into the budgetary process – would focus on real outcomes, not eye-catching announcements designed to raise expectations today, only for them to be dashed tomorrow. It is Labour’s cast-iron commitment to delivering value for money for the British people.”

Dodds will say that the fact the UK’s recession has been the most severe of the G7 group of major industrial countries suggests there have been “significant flaws” in the government’s handling of the Covid crisis.

“The Treasury has appeared continually focused on the need to extricate itself from the pandemic-related economic support packages it initially introduced – despite the fact that this has often been in direct contradiction to the public health evidence of continuing health challenges. This has led to a high degree of instability, which will harm the recovery, leading to greater scarring.”



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