Harvard Law School
Federal Budget Policy Seminar
Briefing Paper 32
The British Budget Process:
A Case Study
Last updated: 5-03-06
Perhaps, the starkest contrast between the United States’ polity and its British
counterpart is the lack of a formal separation of powers. The British Executive has
relatively few checks on its powers. For much of Britain’s history, Parliament has often
struggled with the Monarchy over control of the country; but as the Monarchy slowly
ceded its powers to government ministers, no other checks were put in place to balance
the government’s executive power.1 Further, with proverbial sun setting on the British
empire after World War I, Britain has been in continuous economic crisis, making
economic and fiscal policies the dominant issues. Consequently, governments that were
seen as economically competent (e.g., the Conservatives) reigned for most of the 20th
century.2 The combination of a lack of checks and balances and the constant threat of
economic crisis has created a political culture where economic decision making in the
UK is highly centralized.
The Parliamentary process for budgeting decisions plays out in two events:
First, the Annual Budget Statement delivered in Parliament contains all the revenue
legislation for the year, along with a few spending plans that reflect government priorities
and grab headlines. Second, the Spending Reviews then allocate discretionary spending
among government departments. The most recent spending review, negotiated in 2004,
is biennial, but previous reviews have been both triennial and biennial, but mostly annual.
1 Ian Budge et al., The New British Politics 594 (2d ed. 2001).
2 Id. at 595.
The Chancellor of the Exchequer
The British Parliament has no ways and means committees, no budget
committees, no appropriations committees. The comm