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.”
132 Responses to “More spending cuts on the way if coalition is to meet savings targets”
John Sydenham
What do you think of Sydenham’s Law of public spending and economic growth. Will increasing spending aid recovery?
Gill
Please could you advise me how you would budget £56.25 per week as you seem to be so educated and well informed.
Absolutely_Passionate
Thank you for your kind comments.
In answer to the question, the obvious thing would be to find a better job, but failing that I would buy a bucket, sponge, wax and shampoo and then set up a car cleaning business.
Newsbot9
Ah right, so you would use your cash and contacts, rich man, to set up a new business, harassing drivers.
Newsbot9
Ah right, you have no idea about the poor, and claim your tax evasion is justified because the poor exist. Your “job” stealing food wasn’t good enough for you, you needed a flamethrower…
You’re painting yourself as a victim for living off unearned income as usual.