FactCheck: who is cutting spending?
Updated on 10 June 2009
Is public spending set to rise or fall? Brown and Cameron trade claims; FactCheck looks at the numbers.
The claim
"Let me read the figures on public spending so there is absolutely no doubt about what I am saying, and that [David Cameron] has got it wrong:
"Public spending this year is £621bn. It rises next year to £672bn - (that's this financial year) - then to £702bn, then to £717bn, then to £738bn, then to £758bn.
"That is public spending rises! The only party that's proposing a cut in public spending is the Conservative party."
Gordon Brown, prime minister's questions, 10 June 2009
The background
Labour are the party of investment, the Tories are the party of cuts. That's the familiar narrative, and one which the government has been pushing since before the last election.
But now things are heating up a notch. This morning, Shadow Health Secretary Andrew Lansley told the Today programme the Tories would protect NHS spending. This meant, however, that other departments would face 10 per cent spending cuts from 2011.
Later, Gordon Brown and Tory leader David Cameron traded blows over spending plans in prime minister's questions.
According to Brown, the shadow health secretary wanted 10 per cent cuts in departmental spending.
"The figures the PM is hawking around are his own figures," Cameron later claimed. "He is planning to cut public spending by 7 per cent in every department for the next three years."
But Brown spewed out a trail of figures which seemed to show public spending would rise year on year. Cameron was the only one planning spending cuts, he claimed.
The analysis
Let's look at the figures, as Brown requested, and see whether there is any doubt about what he is saying.
According to the budget, total managed expenditure - a fairly comprehensive measure of public spending which takes in current spending (eg on public sector pay), investment spending (eg new schools and hospitals), and the costs of depreciation - starts to stack up as Brown predicts.
Table C9 on page 238 gives the figures for total managed expenditure in 2008-9 (£620.7bn), 2009-10 (£671.4bn) and 2010-11 (£701.7bn).
And according to table C4 (page 226), current expenditure plus gross investment will add up to the numbers Brown quotes, until it reaches £758bn in 2013-14.
But what do these cash figures - not adjusted for inflation - actually tell us? Not that much, as Clement Atlee was the last prime minister to cut spending in cash terms - and that was in 1947.
There are two big drawbacks to Brown's big-spending claim, both of which the independent Institute for Fiscal Studies highlighted right after the budget in April.
Firstly, no mathematics is required to see that public sector net investment - that's the show-off spending on building schemes and the like, minus the costs of depreciation - falls despite the increase in overall spending.
Back to table C4, which puts it at £37.7bn in 2008-9, up to £44bn in 2009-10 (so a rise right now)... but then down to £36bn in 2010-11, £29bn in 2011-12, £26bn in 2012-13 and £22bn in 2013-14.
Secondly, within an increasing total of current spending, individual departments' spending still looks set for the squeeze.
The IFS reckons total spending is set for a real-terms cut of 0.1 per cent a year from 2011, the lowest three-year growth since 1996-1999.
But then, there are the costs of the recession to take into account.
The IFS calculated that, between 2011 and 2014, spending on national debt interest would increase by 8.4 per cent year on year.
Increased spending on benefits meant that the slice of this public spending pie left for departments would decrease by 2.3 per cent year on year. (The government has said it will protect spending on international development; how things are split between other departments remains to be seen.)
Add those 2.3 per cent cuts together over three years, and you get a total cut of around 7 per cent - as mentioned by Cameron in parliament today.
If the Tories want to protect spending on the health service (one of the bigger guzzlers of government cash), then it stands to reason that other departments would face cuts of more than 7 per cent. That's based on the figures in Labour's budget.
The verdict
Labour's spending plans - as set out in the budget and quoted by Brown today - show an increase in cash terms, but this translates into a slight fall in real terms.
Spending on public services is expected to face a far tighter squeeze, with departmental budgets expected to shrink by 7 per cent in the three years from 2011.
That's based on Labour's budget; no Tory propaganda required.
FactCheck rating: 4
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The sources
Prime minister's questions, 10 June 2009
Today programme
Budget 2009
IFS budget briefing
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