It’s one thing to talk about how the social web flattens out hierarchies, but it is another thing to see Facebook CEO Mark Zuckerberg — wearing a blue t-shirt — videochat with UK Prime Minister David Cameron about using Facebook to connect with Britain’s 26 million Facebook users for ideas on how to straighten out the UK’s finances.

The British government is partnering with Facebook in “The Spending Challenge,” which asks UK Facebook users for their ideas on how the government can reduce its spending and pare the deficit. The first phase, directed at workers in the public sector, elicited 60,000 comments, and the campaign is now open to all British citizens.

The initiative has already saved Britain millions, maybe billions of pounds, Cameron told Zuckerberg, by providing a platform for engaging the public. “That’s a pretty good start.”

Hat tip to Mashable.com.