Coalition cuts: the IFS's verdict is in
Peter Hoskin 5:07pm
So, the number-crunchers at the Institute for Fiscal Studies have worked their magic and
delivered their verdict on today's spending cuts. You can find their summary here, although the standout line is that the £5
billion in reduced borrowing implied by today's cuts is "less than a tenth of the fiscal repair job that Alistair Darling's March 2010 Budget forecast suggested will be needed over the next
few years".
In terms of capturing just how much remains to to be done, it's a sobering remark. But it's worth remembering that a Labour government wouldn't have made these extra £6 billion of cuts this year. So, by the same thinking, they would have achieved even less than "less than a tenth of the fiscal repair job that Alistair Darling's March 2010 Budget forecast suggested will be needed over the next few years".
As for actual numbers, the IFS calculate that departmental spending is now down by 1.2 percent on Labour's plans for this year, rising to 3.7 percent for unprotected departments. As countless folk have observed today, it's a start – but we're still operating in the margins here. Indeed, if the Office for Budget Responsibility were to upgrade borrowing forecasts before the Emergency Budget, then this year's figures may not differ much from those in the last Budget – even when this £5 billion cut is accounted for.
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Richard of York
May 24th, 2010 5:35pm Report this comment£4bn of the 6 is uncosted efficiency savings that may or may not be achieved.
The stuff that cameron called the oldest trick in the book...all smoke and mirrors.
Roger Davies
May 24th, 2010 5:46pm Report this commentWe will only start to believe that inroads are being made into cutting Labours bloated Public Sector when the head count starts dropping in the tens of thousands. The first 100,000 should be easy.
paul holdstock
May 24th, 2010 6:27pm Report this commentit appears that the new government, as did the outgoing one, seem to rely heavily on future growth to fill in the vast shortfall in government income/expenditure.
providing said growth materialises, this will perhaps do the trick.
if it does not occur, we must be in serious trouble.
i wonder if any coffeehousers can let me know if when the 'growth' figures are published, at say 2% p/a and the inflation figures for the same period are published at 3% p/a are we actually 'growing' at a net 2% above inflation, or are we in fact in a recession of 1% p/a?
GDT
May 24th, 2010 6:30pm Report this commentAim the axe at the base of the tree. Never mind pruning the tips of the leaves.
Naomi Muse
May 24th, 2010 6:33pm Report this commentAt least they are doing something toward reducing that increasing interest payment burden.
They have only been in power for two weeks.
They have not yet had the proper spending review that Labour flunked, so it's difficult to ensure that all of the cuts that could be made, are being made.
George Osborn and David Laws have said that it is only the beginning, but at least they are doing what they said they would.
Olaf Rye
May 24th, 2010 6:40pm Report this commentHmmm ... I have a suggestion for the new government: there should be a ratio of one manager for every thirty people delivering services. This works well in the combat arms of the Armed Forces, so surely the civil service can function well enough without all these managers. I am also looking forward to the abolition of many quangos and government departments. It is time they paid for their collaboration with Labour in destroying the economy.
Wight Tory
May 24th, 2010 6:56pm Report this commentDick el Yorvik, remember the words of Peter Sucliffe on doing his first 10 years, "I could murder a Yorkie..."
Funny thing is, when dickie speaks up, this is the first thing in my head. Stll, 4 years 49 weeks and two days to go ;-)
TrevorsDen
May 24th, 2010 7:13pm Report this commentYou cannot put a budget together inside 4 weeks and you cannot undo preset spending plans in thbat time. It is a start ...
Next comes the proper spending review.
General Zod
May 24th, 2010 10:00pm Report this commentHilarious post from dickie; Labour doesn't know whether to criticise he cuts for being swingeing and liable to kill the recovery or for being insignificant, so it does both.
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