Outlook: Public finances

INVENTING YET another government department sounds like a sure- fire way of costing the taxpayer more money, not less. Not so, it is claimed, with new Office of Government Commerce, which is to be charged with spending Whitehall's pounds 13bn procurement budget more wisely. Alan Milburn, the youthful Chief Secretary to the Treasury, reckons the OGC will shave pounds 1bn off the annual bill.

Lamentably, there is very little which is new under the sun and this idea certainly isn't. Those with long memories may recall the days when Roy Jenkins was in charge at the Exchequer and there was something called the Procurement Policy Committee, whose job it was to, er, co-ordinate Whitehall spending better.

The OGC is the brainchild of Marconi's Peter Gershon. Most of his recommendations - like integrating policy across departments, spreading best practice and bulk buying - are hardly rocket science. When it is possible for one arm of Whitehall to pay 140 per cent more for its gas than another, finding areas of saving should not be hard.

Meanwhile, just as one government department is created, another one disappears. The Private Finance Taskforce, which helps channel private funds into public projects, is itself to be privatised and called Partnerships UK. Barclays, the Pru, Abbey National and Royal Bank of Scotland are all being lined up as shareholders.

Even though its job will be to raise money and then lend it to worthy public sector projects, ministers are uncomfortable about it being thought of as a bank, lest the capital markets get the idea that it will hog all the action or, perhaps worse, revives memories of the old National Enterprise Board.

A better parallel might be Investors in Industry, which also started life as a public sector creation backed by the Bank of England and the high street banks. If Partnerships UK proves anything like as successful, then its first chief executive, Adrian Montague, should be laughing all the way to the bank himself.