'The insistence that government has limits may be one of the most important services that the church offers society.' So asserts Cambridge Papers author David McIlroy in his chapter on the role of government in 'God and Government' and it appears the Treasury may have taken notice.

The media has been full of Canadian political history lessons the past 24 hours, as the coalition government looks to make cuts comparable to what the Canadian government found necessary in the early 1990s, when it needed to reduce a budget deficit of $39 billion, or 9.1 per cent of GDP. Between 1992 and 1996 central government departments saw their budgets cut by an average of 20 per cent, but this decisive action pulled the country out of recession and turned the deficit into a surplus within five years.

Before considering the coalition's response to Britain's £156 billion deficit, it is worth reading some more of McIlroy's analysis. 'By reminding government that its citizens have other, and sometimes higher, loyalties than their membership of a state,' he goes on, the church 'laid the ground for the much wider claim that many other social authorities exist which do not derive from the state and to which the state must defer: families, educational institutions and many kinds of voluntary association, for example. In that insight lay a vital foundation for what in the modern world we have come to refer to as the realm of 'civil society' - that network of intermediate bodies that serve to curtail the predatory instincts of the state.'

Citing Christian ethics professor Oliver O'Donovan, McIlroy writes, 'he holds that government action is only required if, were government to do nothing, some injustice, some public 'wrong' would occur. If no such wrong will happen if government does nothing then government should do nothing. O'Donovan goes so far as to suggest that it could be tyrannical for government to take action when private (i.e. non-governmental) initiative could address the issue equally well.

'O'Donovan's principle would press governments today to identify very precisely the public wrong that their interventions are supposed to redress or prevent and to show why no other agency is equipped to address it adequately.'

I suspect they would both approve, therefore, of the Treasury's announcement today that departments will now be asked to prioritise their main programmes against the following set of criteria to ensure value for money in public spending:

• Is the activity essential to meet Government priorities?
• Does the Government need to fund this activity?
• Does the activity provide substantial economic value?
• Can the activity be targeted to those most in need?
• How can the activity be provided at lower cost?
• How can the activity be provided more effectively?
• Can the activity be provided by a non-state provider or by citizens, wholly, or in partnership?
• Can non-state providers be paid to carry out the activity according to the results they achieve?
• Can local bodies, as opposed to central Government, provide the activity?

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