Impact case study database

Lack of transparency erodes legitimacy, encourages waste and corruption, and threatens the services available to citizens. Heald’s research on transparency has been, “important in raising the profile of fiscal transparency and improved public sector financial reporting among policy-makers, practitioners and civil society groups… [and contributed] to managing risks to fiscal sustainability and public services, and… to the development and dissemination of good practice.” (statement from the Auditor General for Scotland, 2012-20 **[5A]**).

From 2015-20, Heald has continued his career-long strategy of contributing to the international and domestic public financial management community, providing not only relevant research but also findings translated into formats that meet the needs of international organisations, national and devolved governments, UK and devolved parliaments, and public audit institutions. The Auditor General for Scotland wrote, “I have seen the impact of his [Heald’s] work internationally through organisations such as the IMF and the OECD, and directly in Scotland as the Scottish Parliament has taken on major new fiscal powers over the last five years.” [5A].

4.1. At international level

Heald’s research [3.1, 3.2, 3.3] has underpinned briefings on fiscal transparency to international policy actors including the IMF’s Fiscal Affairs Department, the OECD, the South Korean Ministry of Economy and Finance, and the World Bank Governance Division (confirmed by collated evidence **[5B]**).

In response to a request from the then UK Prime Minister, David Cameron, an IMF technical assistance mission carried out a Fiscal Transparency Evaluation of the UK in 2016. The team was familiar with Heald’s research and met him as part of their fieldwork (confirmed by statement from the former head of the IMF Public Financial Management Division **[5C]**). The resultant IMF report, “concurred with Heald’s commendation of the technical achievements of the UK Treasury”, but also (a) “his identification of the severe fiscal risks from PPPs [Public-Private Partnerships] and other off-balance sheet techniques such as government guarantees” and (b) “his criticisms of the lack of timeliness of Estimates”. As a result of the report, better documentation is now provided on fiscal risk, but progress on timeliness is less likely because the UK Government asserted its prerogatives over Parliament during the conflict over Brexit (confirmed by official reports **[5D]**).

While proponents argue that PPPs offer a more efficient use of public funds and more streamlined processes than publicly funded vehicles, current public sector accounting rules and public finance statistics allow PPPs to be used to hide public debt and often suffer from a lack of transparency and limited public scrutiny. Heald’s research has been reported in the Economist, and by the BBC [5L]. His contributions to the OECD’s Senior Budget Officials Network (2016-2020) in “the areas of PPPs and government guarantees, particularly in relation to neutrality in project appraisal and financial reporting…have strongly influenced International Transport Forum/OECD positions” (statement from the ITF/OECD Procurement and Private Investment in Infrastructure Lead **[5E]**).

Heald’s transparency research has also impacted on the development of harmonised public sector accounting and greater alignment between government financial reporting and statistical accounting (i.e. national accounts). He contributed to the Eurostat project to develop European Public Sector Accounting Standards (EPSAS), and presented his research findings at the European Court of Auditors [5F]. The EPSAS Project Lead confirmed, “[Heald] reminded us through his research that improving fiscal transparency is a continuous process that must be nurtured and protected [and] made an important contribution to the work of statisticians, through the clear linkage in his work between statistical accounting and public financial management.” (statement from the Head of the EPSAS Project , Eurostat **[5F]**).

4.2. At UK level

Heald also translated his transparency research into a wide range of briefings for UK policy actors on fiscal transparency, including Ministry of Housing, Communities & Local Government, National Infrastructure Commission and the Study of Parliament Group (confirmed by collated evidence **[5B]**).

Heald demonstrated to the Public Administration and Constitutional Affairs Committee of the House of Commons that the UK’s impressive accounting reforms, regarded as among the most sophisticated in the world, have not been matched by transparency advances in accessibility and use. He was extensively cited in the Committee’s report on Accounting for democracy: making sure Parliament, the people and ministers know how and why public money is spent (April 2017) (confirmed by official report **[5A]**). Following a Treasury review of enhancements to the clarity and usefulness of financial reporting, Heald was appointed by the Treasury to its newly-established User Preparer Advisory Group [5D], where at the first meeting on 23 January 2020 he secured agreement that associated documents and minutes would become publicly available after the subsequent meeting, thus enhancing transparency.

To improve quality and scrutiny in the UK, Heald argued for a Spending and Tax Committee that would look explicitly and continuously at the relationship between expenditure and revenue. He highlighted problems with the current ex ante system, which is Executive-dominated and legislated four months into the financial year. Heald’s research-based proposals [3.1] were extensively cited in the Procedure Committee’s 2017 report on Supply and taken forward in the 2017-19 Parliament through its Budget Committee inquiry, to which Heald provided further written and oral evidence cited in the basis for conclusions. They “clearly helped to shape the Procedure Committee’s subsequent proposals for a Budget Committee and the Committee’s understanding of the need for separation between the functions of the new Committee and the audit-related roles of the National Audit Office and Committee of Public Accounts… Professor Heald’s involvement and advice has helped the Committee to frame recommendations which reflect an understanding of the concerns and priorities of the Treasury and the National Audit Office and which are thus likely to have an enduring impact on how Parliament undertakes its financial scrutiny role in the future.” (statement from the Managing Director, Select Committees Team, House of Commons **[5D]**).

Using his research [3.6], Heald contributed to the parliamentary analysis of the UK fiscal response to the COVID-19 pandemic, submitting written evidence (August 2020) to the Treasury Committee’s Inquiry into Taxation after Coronavirus [5D].

4.3. At the level of devolved government within the UK

Heald’s impact has been to increase the transparency and accountability of Scottish public finances, including support for government statisticians’ improvements in data quality (confirmed by statement [5G] from the Regulatory Services Office for Statistics Regulation, UK Statistics Authority). Heald gave research-based oral evidence in sessions with Scottish Parliament Committees and in a private meeting with the Budget Process Review Group, commissioned by the Scottish Parliament and Scottish Government to review the budgetary process and reinforce the principles of transparency and accountability (confirmed by official reports **[5H]**). “His work on the theorisation of public audit has helped Audit Scotland and other public audit agencies to clarify their purpose, recognising public trust as an important side effect of effective public audit, achieved through increasing fiscal transparency rather than as an end in itself.” (statement from the Auditor General for Scotland, 2012-20 **[5A]**).

The Fiscal Framework agreement between the Scottish and UK Governments determines how Scotland is funded and underpins the powers set out in the Scotland Act 2016. Heald advised on the choice of the block grant adjustment mechanism within the 2016 Scottish Fiscal Framework after tax devolution was extended , and is now contributing to Scottish preparations for the 2021 renegotiation with the aim of enhancing the accountability of Scotland’s public finances (confirmed in a statement from the Chief Economic Adviser to the Scottish Government **[5I]**).

The impact of his research on the 10-year journey to Welsh fiscal devolution has been acknowledged by Mark Drakeford AM, then Cabinet Secretary for Finance, and Simon Thomas AM, then Chair of the National Assembly for Wales Finance Committee, who described Heald as, “one of the people who played a part in helping successive Welsh Governments and National Assemblies on this fiscal devolution journey.” [5J].

Heald’s research [3.5] was extensively cited by the UK Parliament’s Public Accounts Committee in its 2019 report [5J] criticising the operation of the funding arrangements for Scotland, Wales and Northern Ireland, continuing the pressure for greater transparency to which the Treasury has slowly responded.

Heald’s research [3.4] has also impacted on the policy analysis of how Brexit will affect Scottish public finances and public services. His ESRC-funded series of seminars was attended by government officials, business leaders and EU diplomats as well as academics [5K]. He submitted evidence to the Scottish Parliament’s Finance and Constitution Committee on 27 September 2017 regarding the impact of Brexit on the Scottish budget, and was involved in the planning by Audit Scotland on the direct implications of Brexit for Scottish public finances and public services (2018) (confirmed by collated evidence **[5K]**).

Recently Heald chaired a committee of the Royal Society of Edinburgh (RSE) which in October 2020 submitted an Advice Paper [5J] to the Scottish Government consultation on the COVID-affected Scottish Budget 2021-22, then represented the RSE in the stakeholder consultation on 5 November 2020 chaired by Kate Forbes MSP, Cabinet Secretary for Finance [5J].

Thus, through a deliberate cyclical engagement strategy of research stimulated by policy and practice, Heald’s work has impacted on the protection and promotion of fiscal transparency in the Scottish Government and Parliament, the UK Parliament and Treasury, and internationally through the OECD and IMF.