Tracking public expenditure to assess impact on different aspects of life has been made much more of a possibility with the advances in IT and associated software. When I carried out research initially on the regional impact of defence expenditure way back in the early 1970s and then on public expenditure and taxation on the regions in the UK this required delving into the basis data to see if there was any classification and, if not, building it up from the available information. Nowadays such classification is built into the system in many countries given the experience from Subnational PEFAs. Although SN PEFAs only cover expenditures and revenues within the subnational jurisdiction, data on central government expenditure within geographical areas is provided in many countries (for example Georgia, Ukraine and Moldova). The expansion of PEFA to also focus on Climate and Gender incorporates tracking in CRPFM-2 Tracking climate-related expenditure and GRPFM-6 Tracking budget expenditure for gender equality though such tracking is much more a work-in-progress.
A recent paper “Counting what matters how to classify, account and track spending for prevention” by Andrew O’Brien and Anita Charlesworth
https://demos.co.uk/wp-content/uploads/2024/12/Counting-what-matters_2024_Dec_V4.pdf. The paper by Demos and the Health Foundation argues for Preventative Departmental Expenditure Limits (PDELs). The reports structure is:
Context page 4
Overview page 5
The prevention measurement challenge: public spending classifications page 6
The prevention measurement challenge: types of prevention activity page 10
Preventative expenditure and health page 13
Preventative expenditure and homelessness page 18
Preventative expenditure and children’s social care page 23
Building a system to implement PDEL page 27
PDEL and parliamentary accountability page 31
Conclusion page 35
One of the challenges addressed in the paper are the definitional complexities. One of the points made is that the classification of expenditure must be presentable in a way that can advance a significant important policy goal to justify the effort of measuring and tracking this form of expenditure. It uses the case of capital expenditure as an example. The broad argument is that Spending Reviews should be policy related and take a wider rather than narrower classification related to impact.
Given the use of software and IT, how widespread could this approach be developed? The Demos and Health Foundation paper makes sense given that prevention is better than cure as the saying goes. Any other cross cutting areas that would benefit from such an approach? Over to the PFM Boarders for a New Year’s debate.......?
