The UK Treasury is one of the western world’s oldest state institutions, and an archetype of a powerful finance and economics ministry. The Treasury plays a significant role in policy decisions in the UK – a role that has come in for renewed scrutiny in recent years. But it has also been a model for reforms abroad. South Africa famously modelled its fiscal institutions on the UK in the post-Apartheid era, while reforms in the UK have influenced international standards for practices such as public investment management and medium-term budgeting.

The UK Treasury has also been through a period of significant change. Embarrassed by the UK’s chaotic exit from the Exchange Rate Mechanism in 1992, the UK Treasury embarked on a significant overhaul of its organisation and its approach to spending controls. Functions such as monetary policy and fiscal forecasting were given up while the framework for spending control became accruals-based, offered greater flexibilities for departments, and established multi-year spending limits. The organisation itself became younger, less hierarchical and more engaged in policy.

This event will look back at this critical period in the UK Treasury’s history, drawing on the findings from a new book “The Way the Money Goes: The Fiscal Constitution and Public Spending in the UK” authored by Christopher Hood, Iain McLean, Maia King and Barbara Piotrowska. We will explore how spending controls improved in the UK, if at all, and what lessons there are for public financial management reforms in other countries.