Read this essay to learn about:- 1. Structure of British Treasury 2. Functions of British Treasury 3. Control.
Essay # 1. Structure of British Treasury:
In Britain, the Treasury is the counterpart of the Bureau of Budget in U.S.A and the Ministry of Finance in India. But there are substantial differences between the structure and functions of Treasury in U.K. and those of Finance Ministry in India. The Treasury is much more than an organ of financial control. It has other traditional responsibilities also. It is not merely responsible for the financial policy of the government but the control of civil services is also vested with it.
It thus occupies a special position in the administrative organisation in U.K. The Treasury was first commissioned in 1612. The Board of Treasury was composed of seven Lords or Commissioners; the first Lord of the Treasury, second Lord (Chancellor of Exchequer) and five junior Lords.
Though the Board has not met since the middle of the last century, its statutory existence has not been disturbed and the treasury minutes continue to be issued in the name of the Lords of the Treasury. At present, the Prime Minister is the first Lord of Treasury. As Treasury is the Prime Minister’s department, it adds to its prestige and authority.
The Prime Minister, however, takes no part in the transactions of normal treasury business but concerns himself with the administration of civil service. The second Lord, the Chancellor of Exchequer, is the effective ministerial head of the Treasury and is responsible for the financial and economic policy. He is assisted by two Secretaries-the Financial Secretary and the Economic Secretary.
The former is associated with the handling of the government’s general financial business in the House of Commons and the latter with the policy relating to overseas finance, economic, currency and banking affairs. There are two permanent Joint Secretaries also in the Treasury; one is the in-charge of financial and economic works and the other is the m-charge of residual work.
These two Joint Secretaries enjoy higher pay and status than the permanent Secretaries in other departments. The Treasury also has four Second Secretaries, seven Third Secretaries and 12 Under Secretaries.
Essay # 2. Functions of British Treasury:
As the Treasury has to perform dual functions of Administration of Finance and Administration of Civil Service, it has been split into two wings, the financial wing and the service wing The Financial wing is responsible for Financial Control and Economic Co-ordination and for maintaining the economic stability of the country and to this end, economic planning and allocation of priorities are included in its functions.
It initiates fiscal policy on the basis of economic situation prevailing from time to time. It collects the revenue and allocates supplies to the departments, it exercises control over the departmental expenditure in a general way and lastly it administers Public Debts, Banking and Currency.
This wing has three major divisions known as Home Finance, Overseas Finance and Supply Services and three sections of central economic planning staff, overseas co-ordination and economic section for coordinating economic policy. The Treasury is thus not concerned only with the control of departmental expenditure but with broader issues affecting national economy.
The Service Wing of the Treasury is responsible for policy relating to recruitment, promotion and retirement of the Civil Service. It deals with questions relating to their pay scales, conditions of service, grading of classes, etc. This wing has three important Divisions-The Establishment Division, the Organisation and Method Division and the Training and Education Division.
Essay # 3. Control of the Treasury:
The Treasury exercises control over finances in so many ways. Since 1861, the Treasury has been approving all estimates before they are presented to the House and has been exercising control over them even after the Parliament has approved them. All departmental estimates embodying departmental plans and policy are submitted to the Treasury for examination and acceptance.
This affords the Treasury not only the opportunity to assess them individually but also to have a broad view of the policy of department as a whole. It can effect such economies as are feasible in the estimates and expenditure before their presentation to the House.
Hence, it occupies a place of primacy among all other departments and as a recent writer said he power and unpopularity of the Treasury rise like twin Everest’s above the lesser peaks of the spending departments, with its call signal, once observed by Gladstone, to be “No, No, No” heard ringing through the ages.
It should, however, be noted that if there is a disagreement between a departmental minister and the Chancellor of Exchequer, the final decision is made by the Cabinet. The British Treasury has been portrayed by the critics as the best system of direction and internal control so far devised by human ingenuity.
The Treasury department is wholly responsible for exercising day to day supervision over the allocation of finance to the operating agencies. As a matter of fact through its sanctioning of money and employment of personnel it maintains a managerial control over work operations.
Further, the departments have no authority to incur expenditure in respect of any new service or even on any approved scheme beyond the amount authorized.
The Treasury will satisfy itself that the changes in expenditure are necessitated by new developments; only then it will allow the supplementary demands to be presented to the House, nor will it allow to transfer saving in one sub-head to another sub-head without such satisfaction.
In the past, the Treasury exercised strict control on every item of departmental expenditure within the scope and amount of appropriations voted but now this responsibility has been given over to the departments themselves. Responsibility for efficient and economical administration rests on the Head of the Department who is nominated by the Treasury as the Accounting Officer in respect of the department.
The Permanent Secretary of the department is thus at once the department chief and the Treasury representative. Where the departments have field offices, heads of these offices are nominated as sub-accounting officers. The head of a department is assisted in his work by a Finance Officer, who is a representative of the Treasury.
The Head of the department can overrule the Finance Officer, though in such cases, the papers of the case can be called and examined by the Comptroller and Auditor-General. Thus in Britain, both the administrative and financial services are integrated together within the department itself.
The last stage in the parliamentary control over the expenditure was provided under the Exchequer and Audit Department Act of 1866, which had created the post of the Comptroller and Auditor-General to ascertain whether parliamentary grants are utilized for the purpose for which they were made and with efficiency and economy.
This official is responsible to the Parliament and not to the Executive branch of the government.