Britain has cycled through five prime ministers in a decade. According to a unsparing new analysis of the British state, every one of them failed for the same reason: none managed to confront the dysfunction at the centre of Whitehall.
The argument, set out in a detailed essay for New Statesman, identifies the Treasury as the primary obstacle to effective government. The department wields a degree of control over domestic policy unseen in any other high-income democracy. It directs 80 per cent of public spending directly from London. By comparison, the federal government in Germany controls only 30 per cent of spending from Berlin, a structure that has produced far less regional inequality than Britain suffers.
The subsidiarity gap
The guiding principle for reform, the essay argues, should be subsidiarity: decisions should be made at the lowest level of government capable of handling them. Research on international governance suggests the optimal population size for economic decision-making falls between three and eight million people. The Nordic countries, the Baltic states and Germany's 16 regions all fall within this range. Britain's mayor-led city-region authorities, such as Greater Manchester, sit at the lower end of that scale but have proven effective, particularly when neighbouring mayors cooperate.
Andy Burnham, the mayor of Greater Manchester, is presented as the leading example of what devolved authority can achieve. His improvement of bus services in Manchester required a fight with the Treasury, which conceded control only on condition that Transport for London, a body Treasury officials use daily, would supervise the Manchester system. The arrangement, the essay notes, reinforces a two-tier structure of privilege for the capital and disdain for the regions.
Skills vacuum at centre and periphery
The analysis identifies a skills crisis on both sides of the central-local divide. The Treasury recruits almost exclusively from a narrow pool of Oxford and Cambridge graduates in economics and law. These recruits lack practical experience and rotate through ministries every few years, preventing the accumulation of specialist expertise. The consequences are visible in the chaotic taxation of North Sea oil and gas, where the regime has been changed 25 times in 50 years yet raises far less revenue per barrel than Norway's stable system, managed by a dedicated team of 40 industry specialists.
Local government faces a different but equally severe problem. Staff are poorly paid, buried in statutory duties mandated by Whitehall, and forced to bid for money from 140 separate short-term funding pots. The essay cites the annual pothole repair cycle as a vignette of dysfunction: preventive road maintenance is squeezed in the budget, roads deteriorate, ministers announce a special "pothole pot" for councils to bid on, and the bureaucratic cost of the remedial process vastly exceeds the cost of proper maintenance.
This dynamic is self-reinforcing. The Treasury micromanages local projects because it distrusts local capacity, but that distrust is manufactured by the very conditions the Treasury imposes. Talented people have no incentive to develop skills for renewal when they lack the power to implement them.
Culture of elitism and short-termism
The essay describes a Treasury culture of elitism and over-confidence, fed by its homogenous recruitment. Jonathan Slater, a former permanent secretary, is quoted diagnosing a "complete disconnect from context-based practitioner knowledge, compounded by rapid turnover and social arrogance." The COVID vaccine procurement is offered as a case study: venture capitalist Kate Bingham, brought in from outside, immediately saw the need for large advance purchases across multiple candidates. Much of the spending would be "wasted" on failed candidates, a logic the Treasury would have rejected had it not been overruled by top-level political intervention.
Compounding the cultural problem is a structural fixation on the short term. Uniquely among high-income countries, nearly all Treasury allocations to departments and local authorities expire at the fiscal year-end on March 31. Unspent funds are automatically clawed back. Budgets are often not set until autumn, leaving public agencies in uncertainty for months. No capacity for long-term planning exists anywhere in the British public sector.
Four reforms proposed
The essay concludes with four interlocking remedies. First, devolve power to city-regions and other sub-national bodies guided by subsidiarity. Second, overhaul recruitment in both Whitehall and local government to attract mid-career professionals with relevant experience, following the French model of hiring from specialist grandes écoles and the private sector. Third, radically reduce Whitehall staffing, shifting functions to local government or civil society and making redundant those roles that serve only the centre's micromanagement. Fourth, demote the Treasury to the budget ministry it effectively is and build a separate economics ministry capable of long-term strategic planning, the standard arrangement in every other high-income democracy in Europe and North America.
The author acknowledges that even these reforms would leave a daunting legacy of misgovernance. But the argument is that Britain retains deep strengths, and that a government led by someone with Burnham's experience of the centre's stranglehold might finally break the cycle that has trapped five successive prime ministers.
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