Treasury ‘orthodoxy’

Think tank: Institute for Government

Author(s): Giles Wilkes; Olly Bartrum; Rhys Clyne

January 19, 2024

This report from UK think tank the Institute for Government examines what is treasury ‘orthodoxy’ and whether it is a problem for government.

This report examines accusations that rigid beliefs – an ‘orthodoxy’ – shape the Treasury’s economic thinking, with former prime minister Liz Truss and her allies attacking the department for being ideologically anti-growth and anti-democratic in the way it worked with ministers.

While it dismisses these anti-growth allegations – Treasury orthodoxy emphasises the importance of spending control and sound money, as would be expected at a finance ministry – it identifies flaws with the department that cause problems for government.

An imbalance of power at the centre, due to No.10’s comparative lack of firepower and ability to drive strategy, allows a dominant Treasury to fill the vacuum and take ‘ownership’ of whole-government strategy. This leads to bad outcomes in policy and spending, with Treasury spending staff too inexperienced and unable to draw on adequate expertise to make the spending decisions asked of them.

The Treasury is also too quick to micro-manage when it could better delegate more power to departments to spend their budgets, and it remains too secretive, especially in its tight grip over tax policy. More transparency would help, rather than hinder, its work.