Government spending is controlled by the Treasury, which must account for all expenditure by departments. Treasury Ministers and officials must approve all policies that would require expenditure and, as such, play a role in the formulation and implementation of all substantive government policy.
The majority of spending by departments is agreed in negotiations between the Treasury (normally the Chief Secretary) and individual Secretaries of State on a two-yearly basis. This is called the Comprehensive Spending Review or CSR, the outcome of which is published in July of each CSR year (normally years ending in an even number). The CSR sets a Departmental Expenditure Limit or DEL for each department, which is the department's budget for the next three years.
But the Treasury's control of spending goes beyond setting the amount available to departments. It also, in negotiation with the department, sets Public Service Agreements or PSAs, which give the department an objective for its spending and targets to guide the deployment of resources. Increasingly, Service Delivery Agreements or SDAs are also set. These go into more detail on how departmental PSAs are to be met.
Other government expenditure, normally on more variable areas such as welfare, is called Annually Managed Expenditure or AME. It is announced each year in the Budget (usually on a Wednesday in March or April) and may be reviewed or altered in the November Pre-Budget Report.
Parliament, which is the sole body that can authorise taxation, keeps a rein on the use of public resources via the National Audit Office. The NAO can investigate the spending of taxpayers' money and reports directly to Parliament. Ministers and officials may then be required to account for their actions and decisions before the Commons Committee on Public Accounts.