Tynwald will this week hear Treasury Minister Alfred Cannan’s Budget.

The Speaker of the House of Keys, Juan Watterson, has long been a critic of the Budget process.

He explains why here.

The Manx Budget process is the most important and least democratic part of Tynwald.

Treasury’s monopoly over the public purse is a system designed 150 years ago to put maximum possible distance between elected MHKs and the distribution of taxpayers’ money.

The Manx Budget or ’Pink Book’ is a ’take-it-or-leave-it’ document: £1 billion of spending with no further approval process than a vote on the same day it’s presented to the public.

This sacred 100+-page document is kept under wraps until 13 days before it’s voted on.

Members can’t take independent advice about its contents - because it is top secret.

The only place they can seek advice is from the Treasury itself, not exactly independent!

Some elected members have never been involved in finance before, so they have no choice but to place a lot of trust in so few hands.

Unfortunately, our parliamentarians must decide on the whole package a few hours after it is publicly presented to Tynwald, allowing no time for constituents to talk to Tynwald Members before the vote.

Tynwald Members aren’t allowed to amend the budget, even in a cost-neutral way.

They can’t propose any new scheme that costs money without Treasury approval - even if they identify income for it. If Treasury want it, they will fund it; if not, even a majority of Tynwald cannot force the issue.

With 13 years of experience in Tynwald, and having scrutinised government accounts since 2002, I’ve found that these shortcomings truly diminish the valuable scrutiny that parliament can exercise over government.

Of course there are benefits to disallowing amendments by Tynwald Members that increase spending.

There are good reasons for entrusting one body with ensuring a balanced budget, but today’s process is a continuation of days gone by when the Governor was Chief Minister, President and Treasury Minister.

Its roots are in totalitarian dictatorship and are desperately in need of reform.

In 2010, I introduced a Bill into the House of Keys requiring the budget to be presented a month before the vote - allowing amendments to decrease costs or increase revenue.

It required those amendments to be at least cost neutral, assessed by Treasury over a two week period, and signed off by a minimum of four members.

These tentative steps were strongly resisted by Treasury - they’ve been resisted by every Treasury Minister since it’s a dilution of their power.

Administration after administration, MHKs, and ministers have gone along with this smoke-and-mirrors charade: thinking they have meaningful input into the process, and instead finding the Treasury Minister treating them like children caught with their hands in the cookie jar.

Autumn months see those serving on government departments endure summons by Treasury to have spending bids ’critically assessed’, but the information loop is never closed with a justification by Council of Ministers as to which bids were approved and which weren’t.

Why? Because this culture of secrecy extends into the Council of Ministers itself.

The divide-and-rule ethos of Treasury means for increases to be found after a draft is presented, someone else must offer a reduction. Unlikely, isn’t it? In such a silo-based system.

Ministers don’t see business cases from other departments, so they’re not equipped to set national priorities. Everything is at the behest of the Treasury Minister.

And, who reviews Treasury departmental bids? Surprise: no-one does.

Most other countries actually pass laws giving effect to the budget. That allows debate on matters of detail, and permitting proposed amendments that can be accepted or rejected by parliament. That’s what ’good scrutiny’ looks like.

This much needed scrutiny is an opportunity to question the assumptions, review past performance, look for lessons learnt and see how the spending will line up with other outcome measures (are things getting better or costing more?).

The Public Accounts Committee ran a public evidence session on the budget in 2018, but we failed to connect with the public on budget scrutiny.

Given the influence we collectively have over the process, we shouldn’t be surprised by the disengagement. Despite talk of surpluses, we are still spending more than we earn, but Treasury’s is the only version of events.

There is an opportunity for an Auditor-General to demystify the budget and provide independent advice to Members, provide independent assurance, and identify cashable savings that proved elusive to the SAVE programme.

The UK’s Auditor General has a target of £10 saved for every pound it costs to run the office.

Tynwald legislated for this position in 2011, but funds have never been available to fill the post.

Of course, there needs to be a realistic expectation that a government can get its budget through.

Failure to do so is a matter of confidence in government, but with the current ’all or nothing approach’, we should not be surprised if in the future frustrated politicians vote against it on principle.

This is the fourth Treasury Minister that these failings have been pointed out to, but sadly change seems as likely now as it was when the Keys locked horns with Governor Raglan over a century ago, refusing to sit in Tynwald as it protested his refusal to accept a Keys motion to increase spending in 1911.

It’s a key part of Manx finance law that Treasury budget for a surplus (although dipping into reserves is permitted).

However, a budget where members can’t seek expert independent advice in advance of voting is akin to going in blindfolded with one arm tied behind your back.

To decide the entirety of the nation’s finances in a single vote undermines Tynwald’s role as guardian of the public purse.

A Treasury that doesn’t recognise these shortcomings leaves itself open to accusations of arrogance and dictatorial power.

About the Author

Juan Watterson is a chartered accountant, chartered manager, Speaker of the House of Keys and chairman of Tynwald’s public accounts committee.

He has been MHK for Rushen since 2006.