Follow the Money: A Spending Stories Guide for Journalists

    by Lisa Evans
    December 13, 2012

    History is littered with awards and accolades for those tenacious journalists who have dutifully discovered money that was spent on something it shouldn’t have been. Evidence of spending is often the ultimate proof of wrongdoing. These stories have ranged from presidential campaigns spending money on surveillance to Members of Parliament dipping into the public purse for their own benefit, with many variations in between.

    These days, governments are keen to be transparent with their spending. But is this enough to drive out the corruption that so frequently comes with power? By being smart about government spending data, journalists could answer this question in many impressive ways — but only if the data is understandable.



    spending data

    From the point at which funds come into the government’s possession to when they are spent, this money takes a journey. A journey of the kind this kind requires a guide book, and that’s exactly what the Spending Stories project aims to provide in the following weeks — a series of guides for smart journalists who haven’t yet had the stomach for all those government funds, policies, and that strange financial language.

    Much of the spending data released in the name of transparency has left people hungry for more details. This could be because it’s been labeled ambiguously, or the amounts don’t make any sense. People lose confidence in their ability to use the data, and they move on.

    Of course, it’s a nontrivial task to track the flow of public money through the government’s many offices. Often the same money will be reported multiple times because offices have to justify their spending to different agencies, each wanting a slightly different classification of funds. The money as it’s stored by the government office doesn’t help much either — it likely will be labeled for the purposes of someone who has to complete these reports, so it’s simply a memory aid not designed to show how the money fits into the big picture of government spending.


    the allocation of money

    The first guide will be based on the idea that the decisions for how to allocate public funds to different projects are often completely open.

    Focusing on the U.K., the overall process for allocation of money goes something like this: Money held by the Treasury is allocated to government departments in spring through an open parliamentary process. Depending on the department, they will then allocate the money to projects throughout the country. So to allocate money for health care in the country, a formula is applied that takes into account things like how many people live in the area covered by the hospital, the age of the people in the area, and so on.

    If you want to know why a certain hospital received more money than another in the same area, you can look up the formula used to allocate money to hospitals and work out why. The same applies to schools, police services, fire services and councils.

    When the formulas change, as you can see in this debate, and when the money is cut, as in these austere times, there’s the potential for the cuts to be disproportionate, as this plain English guide to grant reductions explains. If you want to look for correlations between spending and demographics, knowing the formulas really helps — there’s really no point in looking for a correlation between spending and a factor used in the grant formula. So we will provide a list of the variables that go into the formulas and suggest other useful demographics to correlate the spending with.

    other resources

    That’s just a short taster of what’s to come. Other resources we aim to provide are:

    • A guide to the many ways of grouping spending in the U.K. and beyond to help you find what you’re looking for;
    • A guide to tax models. The U.K. uses a model called the General Computation Model — we look at it in detail through contact with researchers involved;
    • A guide to tax avoidance and evasion — with a full set of choices of stories from shadow markets in Africa to big companies setting up overseas shell companies;
    • A guide to reading accounts both public and business;
    • A guide to spending transactions in the U.K. and beyond;
    • A guide to outsourcing services and how to judge if they are good value for money.

    As you can see, some of these are topic-specific, such as the tax avoidance, and some are related to particular resources the government has released. Overall, we hope they will provide the tools needed to really look into corruption and be an expert in using spending data intelligently.

    We look forward to hearing what you would like from a public spending guide on our mailing list.

    Lisa Evans is a software engineer and journalist. After helping to create Where Does My Money Go, she worked with the Guardian’s datablog. She now works on OpenSpending.

    Tagged: government funds guide book journalists openspending spending data spending stories

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