But he had also shown that he had the managerial skills to steer successfully one of London's largest public housing departments – Camden council's – through Conservative expenditure squeezes between 1990 and 1995.
One defense analyst said the move highlighted the scale of the spending squeeze on defense in Britain, one of many countries reining in military expenditures despite U.S. worries that European capabilities are falling behind.
The new system has almost the opposite weaknesses: it induces short-term planning, in which capital expenditure is squeezed in favour of current spending, and allows the volume of outputs and inputs to be governed by optimistic assumptions about price increases.
This is not surprising since all education expenditure was squeezed during the economic crisis of the 1980s.
For its first three years in office, the government squeezed expenditure ferociously.
Minghetti eventually managed this, but raising taxes and squeezing expenditure made the right unpopular, and its candidates did badly in the 1874 elections.
The report warns: "It might be said that arts and culture is experiencing a pincer movement effect in the aftermath of the financial crisis: reduced consumer expenditure due to squeezed incomes, and reduced public spending".
But aping a slogan first used by Tony Blair to characterise Labour's policy on crime - when he pledged to be "tough on crime and the causes of crime", Mr Balls said he would focus on generating wealth as well as squeezing expenditure to boost the finances.
Pressures on the £37bn annual defence budget and the Treasury's short-term attempts to squeeze military expenditure, notably when Gordon Brown was chancellor, have been hotly debated, triggered by evidence to the Chilcot inquiry on Iraq.
The move has infuriated oil companies (see article).More unexpectedly, the chancellor intends to squeeze spending from spring 2008, when the next set of expenditure plans comes into effect.
