Treasury channels Silicon Valley culture

BORIS JOHNSON and Rishi Sunak are to ditch decades of Treasury orthodoxy, prioritising public spending on projects that will “move quickly, start small and fail fast”.

In a major speech this week, Steve Barclay, the Chief Secretary to the Treasury, will reveal plans to import a venture capitalist-style approach from Silicon Valley, which would champion “innovative” schemes and those that would be the quickest in delivering the Government’s promises on infrastructure, roads and energy. The overhaul will mark a break with the more cautious approach traditionally adopted by the Treasury, that led to Philip Hammond, Theresa May’s chancellor, being dubbed “Spreadsheet Phil”.

In a speech on Tuesday to the influential Onward think tank, Mr Barclay, who is leading a review of all Whitehall spending, will describe the Treasury as “the new radicals”.

The shake-up is likely to lead to similar moves to the Government’s controversial £400million investment in OneWeb, a bankrupt satellite firm, as part of its plan to replace the use of the EU’s satnav system. It is also likely to put ministers on a series of collision courses with senior civil servants.

He has recruited a team of analysts and developers from Silicon Valley firms to help import some of the practices of US tech investors.

Mr Barclay, a former Barclays executive, is expected to state that the spending review, which will set budgets for government departments, will be a “review in which we think differently about what government is, what it does

and how it does it”. Months after Dominic Cummings, the Prime Minister’s senior adviser, invited “data scientists, project managers, policy experts and assorted weirdos” to apply for government jobs, Mr Barclay will pledge to transform the Treasury into “the department that marshals together people, ideas and best practice, from inside and outside government to make things happen.” Mr Johnson’s “Project Speed” mantra will be placed at the heart of Treasury decision-making after senior ministers highlighted how Whitehall worked at breakneck speed to deliver schemes in response to the Covid-19 outbreak, that would normally take at least six months to come to fruition.

Mr Barclay is expected to cite the example of the Treasury’s furlough scheme to subsidise up to 80 per cent of individual workers’ wages.

He will point out that the scheme was announced on March 20 and opened for applications a month later, with money arriving in workers’ bank accounts shortly after under a brand new system.

He will say: “If the wheels of government can be made to spin this fast in a crisis with all the added pressures of lockdown, why can’t it happen normally?”

Mr Barclay and Mr Sunak, who cofounded a large investment firm in Silicon Valley before entering politics, are seeking to adopt project management processes used by American technology companies, and adopt practices that improve the Treasury’s use of data – a priority that is shared with Mr Cummings.

In a letter to ministers last week, Mr Sunak warned that they will have to make “tough choices” over public spending as he prepared to make cuts to help pay for the impact of the coronavirus pandemic.

Departments bidding for funds as part of the spending review will be asked to “rigorously agree outcomes” with the Treasury, as part of the approval process, allowing ministers to be held to account for their use of funds.

Mr Barclay is expected to say that the changes are intended to help deliver the promises made by the Conservatives at the general election and in the Budget.

Mr Johnson has pledged to “level up” the country and to preside over a major infrastructure programme including 40 new hospitals, road and rail improvements, investment in flood defences, and the roll out of “gigabitcapable broadband” across the whole country.

Earlier this year, Mr Sunak announced a review into the decadesold “green book” rules which favour investment in wealthier parts of the country.

Mr Barclay is expected to cite the move as an example of the Treasury’s “thinking in action”.