There are three lessons from the Comprehensive Spending Review.
First, don’t believe the spin before the statement;
Two, don’t believe the spin after the statement;
And three, look at the trends in spending and their impact.
Whilst the headlines are saying it wasn’t all bad and the cuts weren’t in the order of 30 per cent, but in some cases 20 per cent, and there is investment in some areas that wasn’t anticipated (sport especially) we can look at the trends.
One lesson immediately is that the revision of growth means that the Government has more flexibility than they thought and we can assume (even though the next election is just under five years away) that this will help prepare for 2020.
The second immediate lesson is that the percentage of spending by the state as a proportion of national income is heading downwards past European levels and moving towards US levels.
This is significant and profound. It means that some of the financial and policy changes introduced over the last five years or so are going to be irreversible without significant investment through taxes should a new (non-Conservative government) wish.
The third lesson is what is happening at the local level: since the late 1970s successive governments have shifted the share of money spent at the local level from taxes raised by city hall to money allocated from Westminster. Now the move is the other way. But it is happening in a context of cuts and social and political change.
The responsibility for spending is being devolved (the shift to city regions or combined authorities) but the resources are not following. Hence closures of many local services which are regarded as non-essential (libraries and children’s services) but at the same time statutory services are bring squeezed – especially adult social care.
We can expect more closures of services for the elderly and these cuts are likely to lead to more localised resistance and opposition. As part of our role we will be monitoring these changes and will post updates and briefing papers too over the next twelve months.
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