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In paragraph 10 of his memorandum, the Lord Presient refers to planning Government expenditure for several years ahead. There are, of course, some services which lend themselves to actuarial calculation. Estimates for many years ahead have been published for such services. Others again can be rapidly altered in amount by decisions from time to time, so that they can be kept to prescribed targets. But to a considerable extent future Government expenditure is determined by policy which cannot easily be radically altered at short notice and whose cost year by year depends on the working out of factors difficult to estimate in advance with precision.
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Do The difficulties notwithstanding, I am in full sympathy with the idea of planning future expenditure. was with this end in mind that I laid before the Economic Policy Committee in July a forecast of budget expenditure in 1950/51 and 1951/52 (E.P.C.(49) 76), with some very general observations on the trend of expenditure thereafter. I propose to make future forecasting a regular feature of Treasury administration by arranging for a forecast ahead to be made twice each year on the general lines of the fore- cast of last July. One such forecast will be made in the course of the examination each January of the annual estimates, when the expenditure of all Departments for the following financial year is closely reviewed and when it will be spocially useful to have the longer term trend set out in order that it may be taken into account in the consideration of any measures which are necessary. The other would conveniently be made carly in July in time for consideration before the summer recess so that it can be taken into account in deciding upon the Legislative Programme for the coming Session. Such forecasts will enable us the better to assess our ability to finance such new proposals as may be put forward. They may also show the need to modify some of our oxisting policies.
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Finally, my colleagues should know that to implement the Prime Minister's instruction of 26th October (C.P. (49) 216), I have instructed all divisions of the Treasury to take up with Departments the securing of the economies which were put forward in reply to the instruction of the 4th August (C.P.(49) 170), and in addition to advance all practicable proposals for further measures of administrative economy over and above those comprised in the measures covered by the announcement in Parliament on 24th October. I am sure that I can rely upon my colleagues to give the rowcury the fullest co-operation in the securing of economies from their Departments.
Treasury Chambers, S.W.1.,
8th November, 1949.
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