Chapter 2: Financial Management Reform

Whatever its role in fiscal policy or its implications for day-to-day management by government agencies, the question of public finance is one of fundamental constitutional significance. In English history, the evolution of control over taxation and expenditure is intimately tied up with the struggle for parliamentary sovereignty (Einzig, 1959; Normanton, 1966; Webber & Wildavsky, 1986). The Magna Carta was significant not least for establishing the principle of “no taxation without consent.” Parliaments came into existence to facilitate the raising of finance for the Crown and it has been the necessity for supply that has ensured parliaments continue to be assembled. In the seventeenth century, as the House of Commons struggled to gain control over the Executive, the principle of “no expenditure except in amounts and ways approved by Parliament” was established and has been progressively refined in the modern era.