Whilst we await the public’s verdict at the ball0t box, it is fortunate that I have another leak from Dame Lucy about how the true government of the UK is going.
Letter to Dr. Roy Spendlove from Dame Lucy
It is useful to take stock whilst our political masters are off campaigning for their elections. As I suggsted to you at the beginning of the Coalition government, I thought it right to play the austerity question long. Ministers saw the wisdom of signing up to two more years of real spending increases overall in 2010-11 and 2011-12. I think now we do have a duty to point out to them that the tighter spending settlements they signed up to for 2012-15 are going to cause some pain.
In our cross cutting role we can point out that the troubles with border security partly stem from cuts. We need to highlight that if the government really wants us to exercise a level of control over our borders we have not exerted for more than 10 years, they will need to put a lot more resource into the system. We also need to remind them that none of this can apply to our borders with the rest of the EU, where the previous government made changes to promote a common policy with our partners.
We need also to warn them that their bold plans to computerise PAYE so real time information passes to the Revenue and Customs, and then to add to that Treasury calculation of the tax of each individual weekly or monthly, is going to take a lot more effort and spending to get it right. As you will understand, Ministers have signed up to savings on welfare that depend on successful implementation of the new single purpose benefit, coming in around 2015. This of course, can only happen if the Treasury have successfully implemented their real time PAYE system, as the universal means tested benefit is the back end of the income and tax calculations for all in work. I fear Ministers may have underestimated the complexity and potential cost of all this.
I do detect that Ministers would like some way round the substantial capital spending cuts that the last government bequeathed to them. So far the Treasury has reinstated just a small proportion of the cuts.I know you were unhappy at the time that these were conceded, but it seemed to some of us more important to protect the current spending base. I had hoped we would find an opportunity to reinstate many of these projects. I would like you to look again at ways that could be used to redeploy deferred purchase, private capital and the like to bring forward some of this spending. Ministers will not wish it to look like the previous government’s PFI/PPP programmes, which they have in the past criticised. I would like you to find ways of presenting these new methods of financing that would be acceptable all round. Ministers seem especially keen on items that result in construction contracts soon.
I am pleased to report that Ministers have been very understanding of the substantial limits on their freedom for independent action placed by the many Directives and Treaty commitments past governments have made in the EU. The EU position has led to a diminishing interest in deregulation, always something oppositions prefer to governments. Many Ministers have come to accept that the regulations they most would like to remove or amend are European in origin. I think some key Ministers have also been surprised by the frequency and intensiveness of much EU business,and are finding that it absorbs a lot of their energies that might otherwise lead them to ask more questions about domestic business.
Given the current state of public opinion and the recent GDP figures, I think you will find Ministers are now more willing to look at your various ideas for more public sepnding. I would like to see a list of items in the “Spend to save category”, which is how we have programmed the computerisation schemes at Treasury and Welfare. I think we could also relaunch such schemes for revenue collection, benefit fraud reduction, and border enforcement. These schemes would, I think, rightly take priority over any crude idea of cutting the overall government overhead.