Public services 'face more cuts' under brutal squeeze

Cornelia Mascio
Febbraio 12, 2019

Philip Hammond will have to find an extra £5 billion a year by 2023-24 simply to maintain current per-capita levels of day-to-day spending across Whitehall departments which do not have ring-fenced budgets, the Institute for Fiscal Studies (IFS) said.

The Institute for Fiscal Studies told the chancellor that funds pledged in last year's budget to boost NHS spending, defence and global aid failed to safeguard local councils and some of the worst-hit government departments from further shortfalls.

"This would outstrip population growth, putting per capita spending on an upward trend".

"But this would not be enough to meet the cost of the Government's existing spending commitments on the NHS, defence and overseas aid while avoiding cuts elsewhere".

But a Treasury spokesman said public investment would hit peaks not seen since 1979.

Richard Watts, the leader of Islington council and chair of the Local Government Association's resources board, said: "If the government fails to adequately fund local government in the spending review then there is a real risk to the future financial viability of some services and councils".

"We have made clear that health is our number one spending priority by announcing a five-year settlement which will provide an extra £34bn a year for the NHS by 2023-24". To do so he would have to raise taxes, cut other spending or borrow more.

Shadow Chancellor John McDonnell said: "The evidence is mounting that despite Theresa May's rhetoric, austerity is not over".

But any boost to spending would be temporary, and further austerity would eventually be required, the think tank said.

Ben Zaranko, a research economist at the Institute for Fiscal Studies and an author of the report, said: "The Chancellor needs to decide what period the next spending review should cover and what funding to make available to it".

But he said it would be at a much slower pace than the last nine years.

"Nine years of brutal Tory austerity have wounded our public services and the whole country which relies on them".

Brexit uncertainty over the coming weeks is likely to make the situation worse, while the population continues to expand at around 1m people every four years, heaping further pressure on Hammond to find extra funds to meet his promise of ending the austerity programme which began nearly a decade ago.

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