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We are embarking upon growing expenditure without an adequate review phone it is leading to or whether the total bill page of 1997considering desirablage of 17
1097 have can be rarely applied out minds to the question whether we could afford the total bill for all these schemes, with the additions and refinements which later administration introduces.
9.
This is a general criticism of us as a Govern.mt; but it is also true that, in respect of many services, recent legislation has lessened the effectiveness of financial control. The Chancellor of the Exchequer, in a recent discussion of the National Health Service, referred to the unsatisfactory character of the financial relations between the Health Departments and the Regional Hospital Boards (C.M. (49) 37th Conclusions, Minute 1). In other fielās, notably education, Government Departments are now by statute required to initiate and promote developments, whereas previously they tended on occasion to act as a brake upon action by the local authorities, on whom rested the primary responsibilit; for development. This throws a burden of check and control on the Treasury which I do not believe it can reasonably be expected to bear. The crop of supplementaries with which we are threatened is not an accident of this year it is symptomatic of the weakness of present methods of financial and policy control.
10.
What is the remedy? One method would be to plan the size of Government expenditure for several years ahead. I recognise the dangers of this method, if drastic curtail- ment should become necessary; but the present danger is that policies will be entered into which involve a continuous growth of Government expenditure. Ministers ought, to a greater extent than is at present the case, to be forced to consider which of several desirable projects they will adopt within the limits of a specific sum devoted to the services for which they are responsible. The Minister of Defence and the Service Ministers, with the aid of the Chiefs of Staff, are engaged in a comprehensive review of the size and shape of the Armed Forces in 1950-53, with special reference to their cost. I do not wish to be taken as suticfied with the present state of this review, but I think the method is valuable and might be applied elsewhore. Is it not time for an enquiry on the Defence model into the size and shape of the Social Services in 1950-55?
11.
I would also sugest that the Chancellor of the Exchequer should be invited to arrange for regular reports to be furnished to Ministers on progress with other economic measures now in train. I havo particularly in mind the follow- up of the Washington conversations of last September, the drive to increase dollar exports, and the production drive and its accompanying publicity measures. In all these matters, time
Presses
12.
In my paper of 21st July on the economic situation (C.P.(49) 159) I asked whether the Economic Policy Committee or some new committee of Ministers ought not to consider What changes should be made in the machinery for controlling expenditure and for ensuring that measures leading to increased spending received pricr Government sanction. above suggestions are examples of the type of action by the Government which might assist in strengthening the
The
Chancellor's hand and in enabling him to restore a more secure balance between the revenue and the ever-insistent demands for public expenditure.