Conceding flexibility in fiscal management: the case of public spending end-year flexibility

<p>The Treasury struggled hard to reassert short-term control of public spending following the economic crises of the mid-1970s. The result has been an evolutionary move to annualised cash control of public spending with the introduction of cash limits in 1976, cash planning in 1982, and running costs control in 1986. What has been a gain to the Treasury in terms of its ability to control spending has been a loss to the Whitehall departments in terms of their ability to plan ahead on programmes which do not fit neatly into the one-year cycle. This article focuses on the tensions inherent in this, prompting the Treasury eventually to concede to departmental demands for some modification to the principle of firm annual cash limits by introducing in July 1983 the end-year flexibility (EYF) scheme.</p>