Why Westminster is easily the most wasteful layer of Government

Naturally, interest will often zero in on the administrations closest to the citizens they serve, be it local authorities spending on bins, the Scottish Government expenditure on new ferries or other eye-catching stories. Believe it or not, most officials, elected and unelected, go out of their way to ensure value for money. The public sector has never been awash with cash, and even less so now given the UK’s current financial challenges, so this kind of scrutiny can feel frustrating.

Part of the frustration is that there is normally more than first meets the eye to an issue. The overwhelming majority of government officials do their best to ensure that your money goes as far as possible. It is why Reform’s Trump style DOGE units have not found the savings in the English local authorities they control, despite promising to do so, with the Institute for Government describing their efforts as ‘superficial’.

For those who want to gain real savings and efficiencies, they are also looking at the wrong layer of Government. It is at Westminster that policy decisions have been made costing us all eye watering sums of money. Recent figures, produced by the House of Commons library show that annual public spending waste is around £100 billion, almost double the Scottish Government’s entire annual budget (for context about £59.7 billion per year), has been generated since Labour won the General Election – albeit with much of it generated by the party pursuing policy choices inherited from the Conservatives. These figures come from across a wide range of sources. Firstly, there are the really big-ticket items such as the gift that just keeps taking, Brexit. The costly hard Brexit pursued by both Labour and the Conservatives, was never on the ballot paper and so this is all thoroughly unnecessary. In terms of income lost to public finances, that is estimated to be a massive £40 billion per year. That is roughly the same amount by which Rachel Reeves increased taxes by earlier this year, including the damaging National Insurance increases. That is without even considering all of the other associated costs - £12 billion just to prepare for a hard Brexit, including new lorry parks, customs checks etc. as well as the £30 billion settlement bill just to leave.

Even bigger than that sum is the tax gap, worth £47 billion a year, between what the Government is due and what it receives. That figure is not entirely the Government’s fault but is the tax due that HMRC does not collect including tax avoidance, tax evasion, failure to take reasonable care and other areas where income is lost. Then there are still all the PFI payments, with the public sector due to make almost £11 billion in such payments over the course of 2024/25, and a heavy burden still on the devolved and local authorities. Some of these repayments have been estimated to cost 10 times the original cost of building the facilities. In Dundee alone, PFI repayments are £15 million, a third of the amount paid by taxpayers in the city.

Those billions don’t even account for the sums we are paying to finance the UK’s debt. The UK’s debt ratio is much higher than the European average sitting at 96.4 per cent. For comparison Estonia, that celebrated its Independence day on Wednesday this week, has a ratio of 23.6 per cent.

Then there are plenty of other costs. The Rwanda scheme, never really operational has cost £125 million over 2024/25 alone, never mind all of the hundreds of millions over the past few years. Then there is HS2, that will shave about 20 minutes off the train travel time between London and Birmingham. The Chancellor allocated £25.3 billion a year over four years, so about £6.3 billion a year. The total is expected to reach up to £100 billion and speaks to Westminster’s mismanagement of infrastructure projects.

Then there is the issue of over-centralisation and a London centric approach. As First Minister, Alex Salmond gave High Speed rail planning permission up to the border, arguing that it was easier, and the business case stronger, for building from north to south. Given the problems with HS2 it is difficult to argue otherwise, yet here we are billions of pounds later, with the UK still one of the few European countries without High-Speed rail.

In addition, we will pay for energy projects through our bills. Two new nuclear power stations, Hinkley Point and Sizewell C are due to cost £48 billion and £38 billion respectively, costing us all. The Afghan data leak, that put the lives of Afghans who had assisted the UK against the Taliban at risk, is expected to end up costing £850 million and then there were the hundreds of millions of pounds worth of useless PPE we all paid for during the pandemic.

Even within Westminster itself it’s difficult to escape the costs. A recent report put the costs of refurbishing the Houses of Parliament at up to £22 billion albeit over several years. The process is struggling and a new door for the House of Lords that was recently installed is now costing almost twice the price at £10 million but alas it isn’t working yet.

Government is hard, really hard. However, unlike the devolved institutions and local authorities, the UK Government has more financial levers at its disposal, and it certainly makes full use of them. So next time you are reading about a ferry cost, or a local authority overspend, and journalists should continue to scrutinise these costs, a little bit of perspective on how they pale in comparison to the costs generated and squandered by Wastemonster – sorry Westminster, might be in order.

Stephen Gethins is the MP for Arbroath & Broughty Ferry