Cuts in spending across the public services are needed to avoid a fiscal catastrophe

December 09, 2009 9:16 AM

The FT reports that the Government are expected to announce plans to cut spending by 14 per cent over the next three years outside of the core public services of schools, hospitals and the police.


It is very good news that the Government are taking the need to cut spending seriously, that the days of trying to draw bogus political dividing lines by pretending there was no need for cuts are well and truly over.  Yesterday, the Moody's rating agency followed the other main agency Standard and Poor's, which issued a warning earlier this year, by saying that if action isn't taken soon Britain's credit rating will be at risk.  City AM reports the agency as saying:

“While assumed capacity for fiscal adjustment currently supports the maintenance of the AAA rating of the UK government, this assumption will have to be validated by actions in the not too distant future.”

The big problem though, is that the Government are still ring fencing entire areas of spending off from cuts.  But, the areas they are fencing off have all had massive increases in their budgets over the last ten years.  That means there is plenty of fat to cut.


Many non-frontline staff do important work but there is no way that the number of managers and senior managers in the NHS has needed to rise more than twice as quickly as the number of clinical staff (PDF, pg. 18).  If police forces spent less time chasing government targets, and were focussed on the public's real priorities, then they could fight crime more effectively for the same resources.  While schools may be doing important work there could definitely be cuts in interfering local council education bureaucracies and the Building Schools for the Future programme is offering dubious value and could be abolished.  There are a range of potential cuts that would take some of the fat out of these services in our report (PDF) with the Institute of Directors on how to save £50 billion.

"Protecting" any substantial public sector budget will mean a greater burden falls on taxpayers and on other services, some of which have had a relatively tough deal in recent years like defence.  The Conservatives shouldn't have ring fenced health and international development, and the Government should be making it clear that every part of the public sector needs to do its bit, rather than creating divisive lists of which services are for the chop to pay for get out of jail free cards for the others.

The FT reports that the Government are expected to announce plans to cut spending by 14 per cent over the next three years outside of the core public services of schools, hospitals and the police.


It is very good news that the Government are taking the need to cut spending seriously, that the days of trying to draw bogus political dividing lines by pretending there was no need for cuts are well and truly over.  Yesterday, the Moody's rating agency followed the other main agency Standard and Poor's, which issued a warning earlier this year, by saying that if action isn't taken soon Britain's credit rating will be at risk.  City AM reports the agency as saying:

“While assumed capacity for fiscal adjustment currently supports the maintenance of the AAA rating of the UK government, this assumption will have to be validated by actions in the not too distant future.”

The big problem though, is that the Government are still ring fencing entire areas of spending off from cuts.  But, the areas they are fencing off have all had massive increases in their budgets over the last ten years.  That means there is plenty of fat to cut.


Many non-frontline staff do important work but there is no way that the number of managers and senior managers in the NHS has needed to rise more than twice as quickly as the number of clinical staff (PDF, pg. 18).  If police forces spent less time chasing government targets, and were focussed on the public's real priorities, then they could fight crime more effectively for the same resources.  While schools may be doing important work there could definitely be cuts in interfering local council education bureaucracies and the Building Schools for the Future programme is offering dubious value and could be abolished.  There are a range of potential cuts that would take some of the fat out of these services in our report (PDF) with the Institute of Directors on how to save £50 billion.

"Protecting" any substantial public sector budget will mean a greater burden falls on taxpayers and on other services, some of which have had a relatively tough deal in recent years like defence.  The Conservatives shouldn't have ring fenced health and international development, and the Government should be making it clear that every part of the public sector needs to do its bit, rather than creating divisive lists of which services are for the chop to pay for get out of jail free cards for the others.

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