Institute for Fiscal Studies Forecast Decade of Pain - Guardian

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Britain will face spending cuts of more than 16% to key public services, such as law and order and higher education, if Labour and the Tories deliver on their goals to protect schools, hospitals and defence, the Institute for Fiscal Studies has warned.As the two main parties gear up for a bitter general election battle that will be dominated by this issue, the IFS says Britain is facing a decade of pain that will see the tightest constraint in public service spending since 1977.
Concern has grown already this week about immediate shortfalls in the culture and education budgets, but the Guardian is publishing research by the IFS at the start of a two-day series on the future of public spending which reveals that spending on a majority of public services will have to be cut by up to 16.3% over the next three-year spending period – 2011-14 – if the next government is to deliver real-term rises for health, schools, defence and overseas aid.
Labour and the Tories have both said they would like to protect these four areas. They have also agreed, at a minimum, to cut Britain's record fiscal deficit from 11.9% of GDP next year to 1.3% by 2018.
Carl Emmerson, the IFS's deputy director, said: "It could be eight years of pain ... Unfortunately that is the kind of choices we are looking at. It will be very difficult for public services. Under the Labour spending plans at the moment it is the tightest three-year period since 1977 when the IMF were involved in setting spending plans in the UK."
Gordon Brown and David Cameron are warned by Four former chancellors – Denis Healey, Geoffrey Howe, Nigel Lawson and Norman Lamont – say Britain is facing the most far-reaching public spending cuts since the 1970s. Speaking to the Guardian, Lord Lawson, who is advising the Tories, indicates that Cameron will follow the example of Margaret Thatcher, who held an emergency budget within 40 days of her election victory in 1979 to stabilise sterling.
Lord Healey, Labour chancellor from 1974-79, says: "It is always painful to many people depending on what area you cut. It will be very painful for those who get the money at the moment."

http://www.guardian.co.uk/politics/2009/jul/24/whitehall-cuts-forecast

Ouch. Big Ouch. Looks like the Government spending part of GDP is about to get hammered.
Every sector will get hit, 16% cuts across individual departments will be too much to take. Time to take a serious look at Spending on the NHS?

Generali

The obvious thing to do with the NHS is charge for it. If there's no financial cost to using something, people will use it until it costs them in other ways.

People routinely go to their GP with colds and things like that. It's a waste of time and money. If it cost them, they'd think twice.

The problem is, the UK needs to save hundreds of billions of pounds, not just a few quid here and there. You can't tinker round the edges any more. You need wholesale changes and you need them now.

dopester

Generali wrote: »

You can't tinker round the edges any more. You need wholesale changes and you need them now.

True. I'm expecting some sudden shocks ahead. The system as so many people used to know it just can't be held together.

Is that the Australian "you" you're using?

islandannie

Generali wrote: »

The obvious thing to do with the NHS is charge for it. If there's no financial cost to using something, people will use it until it costs them in other ways.

People routinely go to their GP with colds and things like that. It's a waste of time and money. If it cost them, they'd think twice.

The problem is, the UK needs to save hundreds of billions of pounds, not just a few quid here and there. You can't tinker round the edges any more. You need wholesale changes and you need them now.

Thank you Doctor, what an insightfull post.

By the way When are you coming back to the UK?

amcluesent

The 'safety net' of social services has become a comfy feather-bed for three generations of the 'can work, won't work'. In reality, 1 in 6 of working age are on benefits, with perverse incentives to stay that way.

Benefits payments are £330,000 a MINUTE every minute of the year. That HAS to be drastically cut back.

"Those who will not work, shall not eat!"

Davesnave

amcluesent wrote: »

"Those who will not work, shall not eat!"

It isn't that simple, though.

Even if half the useless people in the country decided to go out and work, who would employ them? Most lack the skills employed people have, so a good proportion would probably be more of a liability than an asset.

Considering that well-educated people are finding jobs tricky to find, I don't hold out much hope for the f eckless suddenly transforming themselves, whatever we do. More will simply turn to crime.

carolt

Actually, if the workshy were given/got jobs, they would develop skills - it's too easy to say "Most lack the skills employed people have, so a good proportion would probably be more of a liability than an asset."

And lots more skilled workers would mean a more productive economy, and a smaller benefits bill. Plus lots of happier, more fulfilled people, less crime, and aspiration for future generations.

Win, win win all around.

Davesnave

No, it's not 'too easy.' I pay tax too. I'm not denying that, as a medium-term strategy, reducing benefits paid to the work-shy is essential.

However, as a teacher, you will know that effecting change in behaviour is a difficult process involving an alteration of mind-set, and it just doesn't happen overnight, even among the relatively well-motivated.

I think it's too easy to say, 'Let them starve,' when you and I know that children are involved, so this nuclear option will never be used.

Generali

dopester wrote: »

True. I'm expecting some sudden shocks ahead. The system as so many people used to know it just can't be held together.

Is that the Australian "you" you're using?

It is. I'm not UK resident for tax purposes so I am Aussie in that way. I am English when the Ashes are being discussed!

islandannie wrote: »

Thank you Doctor, what an insightfull post.

By the way When are you coming back to the UK?

Thanks very much for you kind and heartfelt words. I'm not a Doctor but I know a little about economics.

I plan to return for a holiday next year for the Lords test. It's still the best test cricket ground I've been to. Perhaps we could meet up. We'll see.

Wookster

Davesnave wrote: »

It isn't that simple, though.

Even if half the useless people in the country decided to go out and work, who would employ them? Most lack the skills employed people have, so a good proportion would probably be more of a liability than an asset.

Considering that well-educated people are finding jobs tricky to find, I don't hold out much hope for the f eckless suddenly transforming themselves, whatever we do. More will simply turn to crime.

Many of the immigrants who have come here are unskilled, they work in food processing plants, as cleaners, fruit pickers. I don't see why those who have been on benefits for years couldn't do jobs like that, infact they should be doing jobs like that. The only two things stopping them (please add if there are more) is a lack of work ethic and the state benefits system that allows people to stay on benefits for years on end.

Davesnave

Wookster wrote: »

Many of the immigrants who have come here are unskilled, they work in food processing plants, as cleaners, fruit pickers. I don't see why those who have been on benefits for years couldn't do jobs like that, infact they should be doing jobs like that. The only two things stopping them (please add if there are more) is a lack of work ethic and the state benefits system that allows people to stay on benefits for years on end.

Absolutely. I was ripped-off royally just recently by some Poles who'd had the initiative to open a car wash in town, which is the sort of job you are talking about. Perhaps the local authority could organise a few of these operating for £4, instead of the £9 I was charged on the day the Autowash at Sainsbury's broke down.

My point was not that suitable jobs don't exist, just that setting-up schemes to cope with the vast numbers involved will take time and needs careful planning because the 'beneficiaries' will not be cooperative. Many will attempt to use their kids to extract money when all else fails, or else turn to crime.