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The End of the Treasury: breaking up the UK’s finance ministry

This provocation argues that the power of the UK’s Treasury leads to overcentralisation and short-termism. Breaking it up would benefit the UK.

This provocation argues that the power of the UK’s Treasury leads to overcentralisation and short-termism. Breaking it up would benefit the UK.

Key Findings

  • The UK’s Treasury is unusually powerful, combining responsibilities for government budgets, finances, economic policy and tax policy.
  • This power leads to pessimism, short-termism, and overcentralisation throughout the UK government.
  • This could be solved by splitting the Treasury up, moving budgetary responsibility to a strengthened Prime Minister’s department and economic policy to a new Department for Growth.

 

HM Treasury is universally respected for its power and competence. But this power comes at a price. Putting a single department in control of public spending, government finance and economic policy means that what the Treasury says in Whitehall goes.

 

This leads to problems: it makes departments more pessimistic and short-termist, and it entrenches the over-centralisation of the British state.

 

Splitting the Treasury up would help fix this. The report recommends moving budgetary responsibility to a genuine Prime Minister’s department and economic policy into a new Department for Growth, leaving a smaller finance ministry in the Treasury’s place.

 

This change would help the British government be more long-termist and make better decisions.

 

Authors

Giles Wilkes and Stian Westlake

 

Authors

Stian Westlake

Stian Westlake

Stian Westlake

Executive Director of Policy and Research

Stian led Nesta's Policy and Research team. His research interests included the measurement of innovation and its effects on productivity, the role of high-growth businesses in the e...

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