3 Dec 2014

Exclusive: the true scale of the cuts to come

Vince Cable has reportedly written to the OBR demanding they spell out the differences between Lib Dem and Conservative policy over how to make the spending cuts needed in the next parliament.

If you look at this graphic – whose information is taken from the OBR’s report – you can see why he might think the current projections unachievable.

Because the government ringfences spending on schools, health and aid, other departments bear the brunt of cuts.

In 2009/10 – in today’s money – the combined spending on those other departments was £188bn. Today it’s fallen to just £147bn.

But the OBR says 60 per cent of the money to be cut lies ahead – and on that calculation, if we go on protecting health, schools and education, the money available to the rest of Whitehall will be just £86bn.

The IPPR think tank has crunched the numbers and we can reveal their findings exclusively here.spending gfx2

Their calculation says that, using 2016 money, the combined departmental cuts needed would be £54bn over the next parliament.

£4.2bn from the non-schools part of the education budget
£4.7bn from business and skills
£3.6bn from the Home Office
and more than £9bn from defence

Because you can’t calculate the Barnett formula, which allocates taxation to Scotland, Wales and Northern Ireland, you can’t put numbers on their cuts but my estimate, using the same methodology, would be a something like £18bn.

We will end up with a state much smaller than at any time in the past 80 years.

The big question is can services and institutions that have withstood 40 per cent of the cuts so far withstand the other 60 per cent.

The scale of these cuts is the prime reason why no politician – Labour included – wants to spell them out.

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15 reader comments

  1. Alan says:

    The article assumes cuts are de facto, never mind, we know it’s bad but that’s just the way of things. Not all share this resignation. Increasingly more are aware of the betrayal that is being perpetrated upon the taxpayer.

  2. Pete says:

    Makes you so pleased the government plans tospend £100,000,000,000 replacing Trident soon.

  3. Gareth Price says:

    It is with some amusement that I watched tonight’s episode following the Autumn statement with everybody going in circles with no mention of an option. So here is one to present to the MPs. Why not run the Civil service as a commercial business regarding salaries. The business model in the private sector is the man at the helm earns the most and salaries are cascaded downwards. The utter nonsense of its the market that sets the rate, should and must be broke. The PM earns £142,000 per annum. Therefore everybody engaged by the government, irrespective of which department, should earn less. If managers want to leave, then there will be people willing, and able, to do the work. Secondly, the wage gap from the lowest to the highest should be reviewed and revamped in line with the above. Following these savings, then efficiency and responsabiliy, can be reviewed.

  4. Steve says:

    I have no problem with the government cutting £9bn from the military budget.

    I would like us to have a national conversation around what that actually means, and our role on the global stage. We simply cannot continue to participate in as many military actions and training exercises as we do at the moment with that large a cut to budget.

    It is self-evident that cuts of this scale will affect our abilities, but for some reason the government seems to ignore this reality and pretend everything is okay.

    A further £3.6bn from the home office. Fine. What is it that they do now that they will stop doing soon? The biggest part of that budget is policing which is already stressed to breaking point (people have just given up reporting crimes now because they lack the manpower to even investigate non-urgent crimes). UKBA? Where is the money coming from? How many people does that mean we lose, and who does the jobs those people were doing before.

    We voted for a Tory government knowing their ideology, they could at least be honest about the reality of that ideology.

  5. Annie caswell says:

    Having just watched tour news following the budget, Where is all this money coming from to pay for the Nhs, roads, and water defenses? My pension! I was one of the unlucky women to be born in 1955 and paid national insurance since I started work at 16. I now have to wait till I am 67 to get my state pension but have budgeted over many years for a pension next year at age 60. The government have saved billlions of pounds by making millions of 59 year old women who understood we would get our pension, contributed to over 30 years at 60, but now have to wait another 7 years! The money we contributed is now going to finance unemployment benefits and keeping the Nhs funded.. I have had to sell my house, downsize and fund the next 7 years of my life..as my husband retired at 65 and is 10 years older than me. I have never claimed any benefits and I appalled when I read article after article stating that pensioners are more wealthy now than when in employment! The money the government has is from us 59 year old women who have worked hard and believed we would receive state pension at 60 not 67.. A very angry 58 year old lady.. Annie Caswell

  6. Yorkshire Lass says:

    And guess who suffer again? The poor, young, old and disabled. The well-off suffer nothing as usual. Build social housing, create jobs and increase the tax revenues. Tax the arse off millionaires, bankers and megacorps. Job done.

    1. Christopher Sparrow says:

      Alternatively why don’t we have some aspiration, work hard and become “better off” ourselves? “Build more social housing” – it sounds so simple, doesn’t it? Except someone has to pay for this (and that will be tax payers like me and you; or do you propose borrowing more money we can’t afford to borrow?) “Create jobs” – I really don’t know what you are talking about. Creating jobs out of thin air? Governmemt already employs too many people, paid for, remember, by people like you and me. “Tax more?” We are already taxed to the hilt (have you noticed how much we are ripped off in VAT when we do spend some of our hard-earned cash that has already been income-taxed?) In order to raise substantial levels of tax government has to tax lower to middle income people like me and most of hard-working Britons. Thanks very much.

  7. Clive Thomson says:

    Scotland needs to get away from this ASAP.Indyref #2 NOW…………..
    How can they simultaneously announce a 15 billion roads package and then say that further cuts are needed? Also,how can they justify the new Trident weapons system at 100 billion plus?

  8. Peter Nicholls says:

    This is impossible with out destroying everything that the rich don’t rely on. There will be NOTHING left, we will be left looking like 1930s Britain, except it would be of someone design born out of ideological nonsense.

  9. Lulu says:

    If they have been hit 40% already, and are now going to have another 60% taken off them added up it,s a 100% loss ? Is that right or have i misunderstood?

    1. Peter Garbutt says:

      the original cut of 40% means there’s 60% remaining. The further cut of 60% s therefore 60% of 60%, ie 36%, which will leave just 24% of the original 100%.

    2. Christopher Sparrow says:

      40%/60% of expected necessary savings in order to tackle the deficit, as I read it.

  10. Philip Edwards says:

    Any natiion that stands by and allows this kind of thievery deserves all that comes its way.

    The present crop of politicians have proved themselves not only immoral and downright crooked, they have shown cowardice in the face of the capitalist enemy.

    Capitalism remains an ugly cancer on the face of humanity, alien to all the best instincts and attributes of civilised life. Politicians – anybody – who ignore that obvious fact are party to the destruction of what’s left of decent society.

    Britain is well down the road to becoming a Yankified Oligopoly supported by a kleptocracy. There is only one further step beyond that and it is openly totalitarian fascism. And we know where that ends.

  11. Edward says:

    Isn’t it true that the main driver here is to ameliorate or destroy major parts of the public sector to pave the way for expansion of the private sector? This neo-liberal (or is it neo-conservative?) agenda is an American ideology of the 1970s and 80s that does not appreciate the public institutions created in the UK post WW2. If the govt sought a return to this as the status quo then would growth resulting from Keynesian investment (built on borrowing) be the consensus? Instead, it may appear to some that the govt is not motivated by economic growth in the national interest, but dismantling of the UK public sector through austerity in the interests of another constituency, international capital and those that benefit from its constant expansion into new markets.

  12. Andrew Dundas says:

    They’ll be no armed forces then, to challenge the more aggressive stance of Putin’s Russia!! [And no HS2 or road-building and repairs either].
    As some alert media have observed, Russian military incursions into other European nations’ territories have risen steeply in recent years. We’re now going back to the military threats of the Leonid Brezhnev era. Do we really want to leave it to the USA to steer Europe away from these threats?
    The Tories always were appeasers, and the boy Cameron doesn’t understand what’s going on all around him.

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