Major investment is required across departments to deal with problems caused by a “lack of forward thinking” from Government, the head of the Commons spending watchdog has warned.
Public Accounts Committee (PAC) chairwoman Dame Meg Hillier issued a report which focuses on three major recommendations for a future government.
These include long-term thinking and investment, resilience, and risk management and understanding.
The report outlines major spending problems, dubbed “the Big Nasties”, that Government will have to grapple with, including poor infrastructure in hospitals, schools and prisons, and a skills deficit across departments.
Labour MP Dame Meg warned that funds for long-term projects being used for day-to-day spending has created systemic problems requiring significant investment.
The report states: “Government does not do enough to plan for the long term, or to provide long-term investment for its policies.
“This not only causes problems now but leaves problems that will be critical in the future.
“Lack of forward thinking means leaving problems that are more costly and more urgent until they get to a point where they can no longer be ignored.”
Government needs to improve its ability to plan ahead, the report finds, stating: “Failure to embed resilience into policies has caused major problems, which will cost time and money to resolve.
“The five-year electoral cycle leads to a belief or hope that a catastrophic incident will not take place on our watch.”
In relation to health, Dame Meg found that NHS targets for waiting times have not been met for four years, and targets for cancer services not met for six years, which, combined with an ageing population, means more will need to be invested in treatment and prevention.
Hospital buildings are flagged as a major issue that is preventing the NHS from modernising and hampering productivity.
The Department of Health and Social care is accused of “raiding” capital budget funds, and the report warns against any future reduction in capital investment to plug gaps in day-to-day spending.
Similarly in education, Dame Meg warned that a lack of long-term investment has resulted in over 700,000 students learning in a school that needs major rebuilding or refurbishment, and 38% of school buildings are beyond their initial design life.
The report states: “The Department for Education does not have a good enough understanding of safety risks, including asbestos and reinforced autoclaved aerated concrete (RAAC), across school buildings for it to fully quantify and mitigate them.”
Dame Meg highlighted that primary and secondary schools are struggling to cope with numbers of students with special educational needs and disabilities (SEND) despite 81.3% of local authorities overspending their high-needs budget in 2017–18.
If unaddressed, SEND children will remain in a “postcode lottery”, unable to receive the same education as mainstream peers.
The report states the Ministry of Defence has “repeatedly made decisions on short-term affordability grounds which have increased costs in the longer term and led to poor value for money”, adding that the department “has not had the discipline to balance its budgets”.
In relation to justice, Dame Meg said the Government “consistently underestimates the scale and complexity of reforms” necessary to decrease court backlogs.
As with health and education, infrastructure is flagged as a major problem for the Department of Justice, with the report stating that 500 prison places each year are taken “permanently out of action” due to poor conditions.
With local government spending falling by more than 50% from 2010/11 to 2020/21, the report states local authorities are “under severe financial pressure”.
Dame Meg also raised areas requiring spending across departments, including a lack of specialist skills and replacing outdated IT systems.
According to findings in the report, in 2018/2019 the Government spent an estimated £980 million on management consultant fees to fill the skills gap. It adds: “The lack of skills must be addressed otherwise there will be huge risks to delivery of major capital projects”.
Commenting on the report, the SNP’s economy spokesperson, Drew Hendry MP, said it “lays bare the reality of broken, Brexit Britain”.
He said: “It is a damning indictment of the Tory government’s decade-long wasteful approach to taxpayers’ money and disregard for public services – and it should serve as a wake-up call to an incoming Labour government.”
The report is underpinned both by the cross-party committee’s scrutiny work and Dame Meg’s observations from 13 years serving on the PAC.
A spokesperson for the Treasury said: “The Government is protecting the record 2020 increase in capital spending, delivering over £600 billion of planned public sector investment over the next five years.
“This builds on the record £30 billion real terms increase in capital budgets over this Parliament. Any transfers between capital and day to day spending are not from delaying critical capital works but from underspends in certain areas. These underspends can be used to manage wider priorities.”
