Never again can Labour go into an election so distrusted on managing public finances. As leadership candidates discuss rebuilding our economic credibility, another election could have just as big an impact on voters learning to trust us with their money again.

Old ideas of Labour as a big tax and spending party have come back to haunt us and we must work harder than ever to prove them wrong. Sadly, the woman who has done more than anyone else in the party to fight this image has decided to stand down from the role that she performed so well.

The public accounts committee fulfils a vital, if unglamorous function, of scrutinising public spending to ensure tax payer’s money is not wasted. As chair, Margaret Hodge was a champion for effective government spending and attracted much needed publicity for the committee’s important work.

The committee, established in 1861 by then chancellor William Gladstone, now acts as a watchdog for government inefficiency, questioning witnesses on issues of public spending and pushing the government to spend money more effectively in the future. During the last parliament the committee’s work on corporate tax avoidance captured the political agenda and appalled votes across the country.

The race to succeed Hodge is already underway, with Gisela Stuart, Helen Goodman, David Hanson and Meg Hillier in the running. As the committee is always chaired by a member of the opposition whoever wins will have an opportunity to win back some of the credibility on public spending that Labour so desperately needs. Voters need to see Labour politicians taking this issue as seriously as they do.

Too many see the Tories as better keepers of the public purse, with Labour ministers prepared to fritter away tax payer’s hard earned money. Perhaps we have allowed this impression to grow by emphasising additional spending as a good in itself, rather than a means to the end of better public services. Building credibility in this area over the next five years will be essential.

Whoever is the next chair of the public accounts committee will have a crucial role to play in this. They must maintain and increase the profile of the committee’s work, being a visible and vocal opponent of government waste. It is also an opportunity to boost their own profile. Margaret Hodge received more airtime and column inches than many members of the shadow cabinet. The reward for performing the role effectively could be a prime position in the next Labour government.

Labour’s new leader and frontbenchers should work with their colleagues on the public accounts committee to find examples of government wasting money and shout them from the rooftops. As professor Tim Bale said at this year’s Progress annual conference, when scrutinising Tory budgets over the next five years we should not try and make them look uncaring, but try to make them look careless. The series of u-turns in the last parliament that led to the aircraft carrier without any aircraft is a good example.

High public spending is not in itself progressive, and every penny wasted by government is one penny less that can be spent on education, the health service or reducing poverty. We must always be seeking to reform public services to ensure they deliver the best value for money, and a strong Labour chair of the public accounts committee could be vital in rebuilding trust with the electorate.

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Rowan Ree is a member of Progress. He tweets @RowanRee

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Photo: UK Parliament