Financial Times FT.com

Darling must fix a broken spending regime

By Douglas McNeill

Published: August 29 2007 03:00 | Last updated: August 29 2007 03:00

Britain's system for controlling public spending has broken down. That is the true legacy of Gordon Brown's decade as chancellor. Alistair Darling's challenge is to fix it - starting with the forthcoming spending review.

When Mr Brown entered the Treasury in 1997, distrust of Labour chancellors was widespread. Many feared for the public finances. In response, the new government devised a system of self-denying ordinances to constrain its own freedom of action. The "golden rule" would limit spending. The "sustainable investment rule" would limit borrowing. "Public service agreements" (PSAs) would ensure that cash dished out by the Treasury was spent to good effect by other departments. Not only would Mr Brown pursue prudence, he would be strictly chaperoned.

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