Better communication with the public would be the foundation for lasting fiscal change

First published in Public Finance on 21st November 2025.

Over the autumn, we’ve seen a familiar pattern: Budget ideas floated to test public reaction, such as tweaks to income tax or national insurance, only to be hastily ruled out.  

This tax hokey-cokey may serve some political purpose, but you only need to read the comments on a news website to understand that this speculation does nothing for trust in our public finance systems.  

We know from our latest Carnegie UK research that the public’s understanding and faith in our tax and spending systems was already in a sorry state.

In a series of focus groups in England, Northern Ireland, Scotland and Wales we found that people view the tax system as confusing, unfair and beyond their influence.  

The public reported they felt ignorant of the tax system, relying on anecdotes or information absorbed through the media to learn about it. 

People told us about a lack of accessible information and made it clear that they saw no way for them to influence how public money was raised or spent.

These findings matter because they influence the public’s appetite for change. Even without manifesto pledges to avoid tax rises, the appeal of broad-based revenue-raising measures is low.  

In this climate, the government’s options are limited. Yet our research also revealed something more positive: people liked learning about the tax system.  

That’s why we suggest that governments should invest in targeted communication activity to improve knowledge about tax and public spending. Without this, securing support for any significant fiscal change will remain an uphill struggle. 

But better communication alone won’t fix a system that is structurally short-term. The UK needs to take a long-term approach, one that recognises many of our greatest challenges can’t be tackled over a single budget year or even an electoral cycle. Luckily, there is learning we can apply from elsewhere.  

Governments worldwide, from New Zealand to Australia to South Korea, are experimenting with embedding long-term social outcomes into fiscal decision-making. Our report Budgeting for Wellbeing: International Approaches highlights lessons from these pioneers.  

What would this look like in practice? First, governments should better monitor and account for second-round fiscal effects, not just economic ones, in official projections. This means recognising the savings generated by preventative interventions and reinvesting them to amplify impact. Second, wellbeing cost-benefit analysis should be integrated into central budgeting processes. New Zealand’s experience shows that this can help identify areas of maximum impact and strengthen public service capability to plan and deliver for outcomes. Closer to home, we’ve recently taken an interest in the Greater Manchester Combined Authority’s cost benefit analysis approach. 

Readers of Public Finance might respond that these approaches would be impossible to integrate more thoroughly into the UK’s complex and fragmented fiscal landscape. You might highlight that the current systems are shaped by decades of ad hoc reforms, which make scaling any sort of innovation extremely difficult. At Carnegie UK, we’d agree and make the case for a more coherent UK fiscal framework.  

This won’t be easy. Our suggestion would be that we should involve the public through a deliberative process and then build cross-party consensus for changes proposed.  Public dialogue should be central to this process, not only to build trust but to ensure that fiscal policy reflects shared national priorities.

The coming Budget will inevitably be judged on how it balances the books. But if we want a system that does more than firefight crises, one that invests in prevention, fosters trust and improves lives, our finance systems need to be aligned with the wider and longer-term goals of government.