If the coalition is to meet its spending targets it will have to make further cuts to departmental budgets.
Public sector job losses could be significantly more than one million, according to a report published yesterday by the Institute for Fiscal Studies.
Due to the government’s failure to hit its savings targets, job losses in the public sector could be 300,000 higher by the end of 2017/18 than predicted, according to the IFS’s annual analysis of the government’s spending plans.
Within the IFS’s report, however, was also contained the prediction that, if the government continues to ring-fence the NHS budget, overseas aid and schools, spending cuts will need to be significantly more severe if the coalition is to meet the targets of its fiscal consolidation plan.
As things stand, just to keep his current savings plan on track, George Osborne will need to make much larger cuts to departmental budgets than he originally intended.
As we can see from the graphs below, the bar on the left represents what the government intends to cut while the bar on the right represents what the government will need to cut unless it reconsiders its policy of ring-fencing select budgets or increases government revenue through tax rises.
As the report phrases it:
“If such further cuts to departmental spending are not possible without a decline in the quality or quantity of public services that is unacceptable to politicians or to voters, then higher borrowing, further tax increases or social security spending cuts – perhaps after the next general election – must be on the cards.”
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132 Responses to “More spending cuts on the way if coalition is to meet savings targets”
Absolutely_Passionate
Suppose that every day, ten men go out for beer and the bill for all ten
comes to $100. If they paid their bill the way we pay our taxes, it
would go something like this…
The first four men (the poorest) would pay nothing
The fifth would pay $1
The sixth would pay $3
The seventh would pay $7
The eighth would pay $12
The ninth would pay $18
The tenth man (the richest) would pay $59
So, that’s what they decided to do.
The ten men drank in the bar every day and seemed quite happy with the
arrangement, until one day, the owner threw them a curve ball.
“Since
you are all such good customers,” he said, “I’m going to reduce the
cost of your daily beer by $20″. Drinks for the ten men would now cost
just $80.
The group still wanted to pay their bill the way we pay our taxes. So
the first four men were unaffected. They would still drink for free. But
what about the other six men ? How could they divide the $20 windfall
so that everyone would get his fair share?
The bar owner suggested that it would be fair to reduce each man’s bill
by a higher percentage the poorer he was, to follow the principle of the
tax system they had been using, and he proceeded to work out the
amounts he suggested that each should now pay.
And so the fifth man, like the first four, now paid nothing (100% saving).
The sixth now paid $2 instead of $3 (33% saving).
The seventh now paid $5 instead of $7 (28% saving).
The eighth now paid $9 instead of $12 (25% saving).
The ninth now paid $14 instead of $18 (22% saving).
The tenth now paid $49 instead of $59 (16% saving).
Each of the six was better off than before. And the first four continued
to drink for free. But, once outside the bar, the men began to compare
their savings.
“I only got a dollar out of the $20 saving,” declared the sixth man. He pointed to the tenth man,”but he got $10!”
“Yeah, that’s right,” exclaimed the fifth man. “I only saved a dollar
too. It’s unfair that he got ten times more benefit than me!”
“That’s true!” shouted the seventh man. “Why should he get $10 back, when I got only $2? The wealthy get all the breaks!”
“Wait a minute,” yelled the first four men in unison, “we didn’t get anything at all. This new tax system exploits the poor!”
The nine men surrounded the tenth and beat him up.
The next night the tenth man didn’t show up for drinks so the nine sat
down and had their beers without him. But when it came time to pay the
bill, they discovered something important. They didn’t have enough money
between all of them for even half of the bill!
Newsbot9
Yes, you can use a copy/pasted critique which tries to portray you as the victim. The reality is that you’re taking food, not beer, from the poor. Some victim.
Newsbot9
You’re well into heartwood with the chainsaw. The tree’s dying, all you care about is more lumber for your fire.
Absolutely_Passionate
@Newsbot9:disqus
We must cut the diseased wood before it spreads to the rest of the tree.
I like your suggestion about burning it though, that will kill the disease and heat the house – win/win.
Absolutely_Passionate
If anyone in the UK lacks food, it’s because they’ve blown their welfare payments on ciggies, alcohol or drugs or more likely all three.