Public Finance and Public Policy 1

PUBLIC FINANCE AND PUBLIC POLICY

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Public Finance and Public Policy 2

British spending review With the attributes of globalization, the performance of national economies has been significantly enhanced. The establishment of economic performance is one of the significant roles of economic planners of the nation and they must employ the usage of both fiscal and monetary policies to ensure increased development of the nation. Over the year, analysis of the records has revealed that the British economy has continued to experience significant disparities with the development of the economy and in the wake of these realities; the establishment of economic review has been instituted to ensure significant development and increase in the performance of the economy (Brady, 2008). The practice of conducting spending review is a governmental process that is conducted by the government of the United Kingdom with the aim of establishing spending limits of the firms. This is a critical process that involves series of public agreements and they define measures that are applicable to the enhancement of public efficiency. The consideration of public spending is one of the attributes of fiscal policies that used by the economic attributes in the practice of restoring performance of the economy and it focuses upon several aspects of public spending or on just one aspect of public spending. The aspect of public spending is a strong economic policy that use in the regulation of the amount of money in the economy and this has the effect of influencing the income of the nation. The distribution of national income is based on the establishment of economic performance is ascertained based on the attributes of economic performance. During the periods of 2007, the government of the United Kingdom enacted the establishment of three significant steps with the aim of enhancing performance of the economy and these steps resulted in the enactment of the

Public Finance and Public Policy 3 first step that was aimed ascertaining the capacity of spending review plan to enhance consolidation of the fiscal in the United Kingdom. The establishment of spending review is aimed at enhancing the attributes of making choices for the development of the economy. In this regard, the establishment of the reviews has been used to strategically analyze the performance of the economy because the provisions of spending review are critical in highlighting the disparities in the economy. Because of the aspects of strategic choices, the consideration of using public spending review to anticipate performance of the organization is beneficial because it helps in analyzing the establishment and the performance of the various attributes of government spending. Analysis has reveled that spending review has been extremely beneficial for the economy of the United Kingdom because it has helped in highlighting the disparities in the performance of the economy (Canova & Pappa, 2011). With formation of the coalition government, the priorities and performance of the government agents were significantly reduced and this resulted in the consideration of devising adequate measures to ascertain the disparity and complexities leading to the. After the establishment of the disparities in the economy, it was extremely critical for the government to install measures of developing the advents of economic performance. The establishment of the review was extremely critical in highlighting the varying roles of the economic agents and their contributions in enhancing economic growth (Brady, 2008). With the incoming of the new government, strategic measures had to be initiated to help the new administration in conducting issues that will enhance economic growth. In this regard, the establishment of the spending review conducted by the government was extremely essential because it highlighted to the government that the attribute of spending was characterized by immense disparities. Therefore, one of the control measures initiated by the government was to ensure significant reduction in

Public Finance and Public Policy 4 the amount of spending. The realization of this is attributed was initiated through the consideration of reducing the amount of spending in the departments of health and oversea aid. These departments were significantly reduced by 19%. Public finance policy The aspect of public finance highlights the role of government to the economy. The government has devises critical provision for the highlighting the performance of the economy and these included the attributes of fiscal policy and monetary policies. All these policies are formulated and enacted by the treasury because treasury is the branch of government charged with the responsibility of ensuring increased performance of the organization (Seligman, 2012). Both monetary and fiscal policies are the public policies used by the treasury to control the flow of money in the economy, to control inflations, to control spending and to spur economic growth. Taxation and the fluctuation of interest rates are other ideal features that have been used by the government to ensure the performance of the economy is significantly regulated. In this regard, it is clear that the government uses significant variable tools to enhance development of the economy. In the wake of disparities facing the government of the United Kingdom, ideal factors should be enacted in the government to stimulate aspects of economic stimulation because this enable accelerated development of the economy (Slusher, 2012. Acceleration is also required to enable the economy to overcome the suppressions that arise because of increased budget deficit. In order to enhance stimulation of growth, the government has initiated the development of fiscal mandate against which the independent office for budget responsibility judges the activities and the plans of the governors. The am of initiating these developmental policies is to enable development of measures that will help in the elimination of structural budget deficit within the stipulated five year period. Base on this analysis, the development of the spending review is

Public Finance and Public Policy 5 based on the plans initiated by the government to reduce current spending because it has adverse effects on the performance of the economy. Over the period, the government expenses are characterized as capital spending and the aspect of reducing capital spending will be critical in enhancing economic development. The attribute of determining the value of capita budget for the government is critical and the findings of spending review are significant because they help in enhancing the amount of participant tin the economy (Ellis, 2012). The development of economic performance is the ultimate goal of the economic planners under the directive and provisions of the treasury. Over the years, the development of the economy has taken the initiative of the government and the collaboration of the branches on the governments agents. One of the significant agents of government is the attribute of treasury that has the role of enhancing performance of the economy through the usage of financial securities and provisional projects. The establishment of the treasury has the attributes of treasury and its provisions are critical for the economy because they help the economy to continue with the attribute of enhanced growth. Analysis has reveled that the British economy is characterized by significant disparities that has been attributed to the aspects of increased spending. The attributes of government spending are critical because it helps the government in their role of enhancing the provision of public goods to the economy. Furthermore, the aspects of government spending are beneficial because it helps the government in enhancing performance of the economy because spending increase performance of the economic agents (OECD, 2012). Certainly, government spends the amount of money generated from the attributes of development and taxes. In this regard, spending is based on the amount raised from the economic revenue generators. Analysis of the performance of the British economy has revealed that economic performance of the British has been characterized by

Public Finance and Public Policy 6 increasing disparities because of the higher rates of spending that has been enhanced in the economy. The economy has increased its rates of spending to surpass the provisions of income for the economy and this has resulted in the consideration of the aspects of budget deficit. With the aspect of deficit, the economic performance and finance has been adversely influenced and this has resulted in the establishment of the spending review. The establishment of spending review is one of the critical factors that are responsible for the enhancement of economic growth, economic fairness and economic reformation. Therefore, the considerations of adopting the attributes of development are the aspects of growth, reforms in the economy and finally the attributes of fairness. This depiction is extremely beneficial to the economy because the provisions of spending review are applied to the economy to act as the strategic management programs that helps the economic agents in ascertaining the sources of disparities and suggesting possible solutions to the problems with regard to the considerations of fairness to all the participating sectors of the economy. Postula (2012) has pointed out that the usage of the spending review has been essential to the government because it has helped the government in making priorities and making correct choices when considering the factors of development and government spending. The establishment of government spending has resulted in the consideration of employing government cuts of health and foreign aids as a measure of ensuring the growth of the economy is revitalized. Another significant proposal by the spending review is the aspects of transferring power from the central government to the local government because this will enhance increased control of the government agencies and their spending criteria. Spending reviews With the decline in the performance of the British economy, the establishment of spending review has been beneficial because it has proposed measures to increase economic reformation

Public Finance and Public Policy 7 and performance. The development of the spending review proposed the enactment of three provisions for the departmental expenditures. Analysis of the events in the British economy provided that a comprehensive spending review be conducted in 1997 by the incoming labor government (Gruber, 2009, Ferreiro, Del Valle & Gomez, 2012). This attribute called for the establishment of spending review that will lead to the enhancement of efficiency and monitoring of the departments within the sectors of the economy. The aspect of enhancing efficiency will be beneficial because it will result in the establishment increased economic growth. The establishment of this review was also critical because it resulted in the development of public service agreement (PSA) which is responsible for setting the targets for various departments for government departments (OECD, 2011). In a bid to ensure adequate recovery of economic growth, the government has instituted a plan that is concerned with the preparation of spending review after a period of two years and the establishment of this incentive will be essential because it will provide strategic management for the attributes of government over a period of time. This will enable the stakeholders concerned with the budget in assessing the critical aspects that enhances development of the governmental organizations. The establishment of spending has continued to be a critical attribute in enhancing performance of the government and economic development planes because it gathers informant ion that is then processed and subsequent implementation is considered. The establishment of the government spending review has revealed that the reviews and objective of the government agencies be submitted for scrutiny (Hughes Richard, 2008). The firms expenditure plans for the forthcoming years and analysis of the cross departmental issues are also critical because they provide an ideal opportunity for the parliament to countercheck the government spending plans with the consideration of both micro and macro level. The attributes of parliament scrutiny has however been limited by the

Public Finance and Public Policy 8 development of the new spending review time table. The same timetable sees to highlight ad develop the factors of development as stipulated under the provisions responsible for the establishment of economic growth. Fairness is one of the provisions that have featured in the reform program initiated by the government through the consideration of spending review. In this regard, fairness by the government will entails the attribute of spending to support basic skills with the aim of enhancing basic numeracy and literacy skills. The reforms proposed by the review are to continue supporting low income earners in higher education department. Another significant consideration of the spending review is the attribute of initiating establishment of reforms. In order to focus spending on frontline services, the spending review seeks to reduce spending on administration that will seek to eliminate the attributes of spending that will be crucial in enhancing regional development and reduction in the attributes of government spending. Some other reforms that are proposed under the provision of spending review is the attribute of enhancing the performance of the colleges. In this regard, colleges will be freed from bureaucracy by simplifying the funding system and streamlining the arms length bodies (Sineviciene & Vasiliauskaite, 2011). The establishment of the quality of information delivered at the colleges is also crucial and the government must initiate critical measures to ensure that the credibility and quality of information at the colleges is highly enhanced because the credibility of this information will lead to the enhancement of long term economic growth. In order to enhance growth in the educational sector, the government will ensure that anew system of education where the spending will be significant reduced. This new system of education will ensure that the students get access to education and pay at a later period when they are capable of paying. The establishment of this system is aimed at enhancing increased literacy rate sin the

Public Finance and Public Policy 9 economy because this is one of the proposal of the spending review that will result in the development of the economy (Canova & Pappa, 2011). The consideration of enhancing new economic development strategy is crucial because it will enhance the attributes of development and reforms to the economy. With the establishment of the government spending review, the leading option and notion for the conduction of this incentive was to ascertain the contribution of government agencies in the attributes of development and derivation of the certainty of government revenue and government spending. In this regard, the conduction of government spending review has been ascertained to be irreducible process that has highlighted disparities in the economy. The establishment of these disparities has enhanced performance of the economies because the government has ensured that corrective measures are enacted in place to help in reforming the economy. In this regard, the consideration of enhancing the attributes of government spending review has proved to be extremely beneficial and has further enhanced the attribute of strategic analysis and development tool because it has highlighted the disparities in government spending (Slusher, 2012). The activities of spending review has highlighted that the British government has engaged itself with the attribute of enhancing more spending than it generates through taxation and this has resulted in the development of budget deficits. In order to correct the disparities facing the economy, it is highly beneficial for the government to enhancement measures that will ensure reduction in government spending and will also enhance reformation of the government agencies. The development of government spending review has been beneficial and it has resulted in the establishment of three strategies that includes growth, fairness and reforms. These three strategies have acted as the strategic plans enacted by the treasury with aim of restoring the performance of the economy. Therefore, the implication of using spending reviews in the

Public Finance and Public Policy 10 economy is because it enhances growth of the economy, analyzes the disparities and proposes reforms that are enacted with the consideration of fairness. Fairness is beneficial because all the aspects of economy must experience concurrent growth.

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References Brady, M 2008, 'Living with Leviathan: Public Spending, Taxes, and Economic Performance', Independent Review, 12, 4, pp. 620-624, Canova, F, & Pappa, E 2011, 'Fiscal policy, pricing frictions and monetary accommodation', Economic Policy, 26, 68, pp. 555-598, Ellis, C 2012, 'Measuring UK Inflation. Practical differences and issues', World Economics, 13, 4, pp. 99-112 Ferreiro, J, del Valle, M, & Gomez, C 2012, 'Similarities and Differences in the Composition of Public Expenditures in the European Union', Journal Of Economic Issues (M.E. Sharpe Inc.), 46, 3, pp. 633-660, Gruber, J. 2009, Public Finance and Public Policy, Worth Publishers Hughes Richard, 5 May 2008, United Kingdom Concludes Its Fifth Multi-Annual Spending Round International Monetary Fund, available: http://webarchive.nationalarchives.gov.uk/+/http://www.hmtreasury.gov.uk/spending_review/spend_index.cfm OECD, 2011, 'Supporting the recovery and rebalancing the economy', OECD, 2012, 'Value for money and public spending', OECD Economic Surveys: Norway, pp.

Public Finance and Public Policy 12 43-65, OECD Economic Surveys: United Kingdom, pp. 21-51 Postula, M 2012, 'Possibilities for Optimal Fiscal Policy-Making in the European Union', Research In World Economy, 3, 1, pp. 20-27, Seligman, J 2012, 'Support of State and Local Finance under Persistent Federal Deficits', International Advances In Economic Research, 18, 4, pp. 383-395, Sineviciene, L, & Vasiliauskaite, A 2011, 'PUBLIC EXPENDITURE POLICY IN THE CONTEXT OF CYCLICAL DEVELOPMENT', Economics & Management, 16, pp. 1185-1191 Slusher, T 2012, 'FISCAL SOCIOLOGY AND THE THEORY OF PUBLIC FINANCE: AN EXPLORATORY ESSAY', Public Finance & Management, 12, 2, pp. 175-177