The ringfence cycle

By now, George Osborne had hoped to have completed his austerity programme. Instead, he finds himself making what is, still, the most ambitious round of cuts of any finance minister in the developed world. The Chancellor is paying the price for the leisurely pace that he decided to take in the last parliament – due to his habit of buying time by deferring pain.

The Chancellor still doesn’t seem to be in too much of a rush. In his spending review statement this week, he decided to spend some £83 billion more over the parliament than he said he would at the general election.  Foreign aid is not just protected, but will increase by some £3 billion – more than the budget for the Home Office. The science budget, Tony Blair’s great plaything, will increase to £4.7 billion. The NHS budget, the biggest of any government department in the world, will rise by a further 20 per cent. And to pay for all of this, the pain will fall on the people who have already taken most of the pain over the last five years: transport (whose budget is already squeezed by HS2), local authorities and those on welfare or being helped back to work. So people are not ‘all in it together’, as the Prime Minister once said. Some are being protected, others celebrated — and others put to the wall.

The departments that have been cut have coped admirably. The council grant was cut by 40 per cent, yet polls show no drop in satisfaction with services. The police budget is down by a third, but surveyed crime has fallen even more steeply. The education budget is down, but secondary schools are opening at the fastest rate for decades — with 500 more free schools on the way.