How Do You Get Money Out Of The Treasury?
5 min read
While many things have changed in the long history of British politics, this question has remained a constant thorn in the side of innumerable secretaries of state, regardless of their political persuasion. Adam Payne reports
“I’ve got the scars,” jokes one former recent Cabinet minister.
A department asking the Treasury for cash to spend should have two key factors in mind when putting their bid together, according to Cameron Brown, who served as special adviser to erstwhile Conservative chancellors Jeremy Hunt and Kwasi Kwarteng.
The first, he says, is the “strength of the business case”.
“The Treasury is always reluctant to just give money away without conditions, and for good reason,” he says, explaining that the department generally wears “two hats”.
The first is the finance ministry, the more austere section of the Treasury brain, which according to the veteran former special adviser is concerned with “keeping tough control over public spending, ensuring that there's value for money, and ensuring that every pound and penny spent leads to a different outcome that can be measured, whether it's economic growth, reducing NHS waiting lists, or getting more people through the court system, for example”.
And there’s the economic ministry, responsible for driving growth, which is more sympathetic to the argument that “there needs to be some type of state support” to make growth happen.
For the Treasury, it’s always value for money
The relationship between these two parts of the building can sometimes be pretty “schizophrenic”, admits Brown – but he stresses that any departmental bid for money which doesn’t satisfy the Treasury’s safety-first disposition is extremely unlikely to get off the ground.
Former Tory Cabinet minister Baroness Nicky Morgan agrees.
“For the Treasury, it’s always value for money,” says Morgan, who as well as leading two departments during her nine years as an MP also had stints in HMT as financial secretary to the Treasury and economic secretary to the Treasury. “That [value for money] usually means: how much is this thing going to cost? And how long is the commitment going to last?”
Morgan explains that waiting in the Treasury to pore over any departmental request for cash are some of Whitehall’s most meticulous officials, whose primary job it is to spot holes in your bid.
“What people don't necessarily always understand is that His Majesty’s Treasury has its own teams that shadow the other departments,” says the former Conservative MP.
“It literally has people who do nothing but scrutinise, for example, spending on education and schools. It’s another big hurdle [for departments] to overcome. It’s very thorough.”
This mentality often frustrates ministers who argue that the Treasury sometimes fails to see the bigger picture. Or as Morgan’s former government colleague Brandon Lewis puts it, borrowing from Oscar Wilde, seeing instead ‘the price of everything and the value of nothing’.
“My interaction with the Treasury over the years is that it never, ever thought about things in a political sense,” Lewis complained. He served in multiple Cabinet roles before standing down as a Conservative MP in the run-up to the 2024 General Election, including secretary of state for justice and secretary of state for Northern Ireland.
My interaction with the Treasury over the years is that it never, ever thought about things in a political sense
“You could argue that’s their job,” he says.
“But the reality is, politics isn't just about spreadsheets.
“Yes, the Treasury might only have so much money, and I'm a firm believer in making sure the books are balanced, but you've also got to make decisions about how you prioritise.”
He recalls a tense exchange during his brief tenure as justice secretary during the short-lived Liz Truss government which forced him to involve the then-prime minister herself.
“A Treasury official wanted to stop the entire prison building program. 'We need to save money’, they told me. I believe it was the second-biggest infrastructure project in government at the time. I had to go over to see Liz and explain that we can’t just stop the program because we need prison spaces. I had a way of saving about a billion, but there's no way you could stop the program.”
Former Treasury adviser Brown recalls how in the run-up to major fiscal events, his former bosses would meet with numerous secretaries of state, especially those representing big-spending departments, who were keen to impress on the Treasury why their cause was so worthwhile.
This, explains Brown, is the other key factor that Cabinet ministers should bear in mind when bidding for money: the “personal interests” of the chancellor of the exchequer.
“If there is political will, if the chancellor and chief secretary agree with it, it can glide through,” he says, giving the example of Hunt’s strong personal interest in the health service having already served as both health secretary and chair of the health committee.
Given that improving the NHS is perhaps the new Labour Government’s biggest priority between now and the next general election, it should come as no surprise then that Chancellor Rachel Reeves put boosting health spending at the centre of her first Budget at the end of October. Indeed, recent Savanta polling for PoliticsHome found that voters wanted Reeves and Keir Starmer to protect the health service from spending cuts more than any other area.
But what if the chancellor just isn’t playing ball?
Get the PM on the phone, says Morgan. Or, even better, have a walk over to 10 Downing Street.
“I would occasionally go to David Cameron and try to suss out whether he was supportive of something, and whether that could then be deployed against the Treasury,” she says.
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