Cuts are coming under a Tory government - but where will the axe fall? A plan for £50bn worth of savings published by two Conservative pressure groups today offers the biggest clues yet on the options being considered.
The good news is that the Taxpayers’ Alliance (TPA) and Institute of Directors (IoD) argue that the housing budget should be protected from any cuts. ‘Demand for social housing has been increasing across the UK in recent years,’ they say ‘and therefore central government spending on housing should be maintained’.
But even that begs a few questions. Does ‘spending on housing’ mean new homes or maintenance of existing ones too? Will spending be ‘maintained’ at the level seen in the current three-year review period or at the amount left in the final year after spending was brought forward.
Elsewhere, although housing-related programmes would escape the worst of the cuts planned for things like child benefit and surestart, there is grim news for anyone working in the public sector. They will face both a one-year pay freeze and an increase of a third in their pension contributions - saving a combined £8.7bn. Agencies including the design watchdog CABE and the Commission for Sustainable Development would be abolished in a cull of quangos and spending on consultants would be halved.
And the Communities and Local Government (CLG) department would be slimmed down as part of an agenda to ‘cut out the middle men’. The report identifies that CLG plans to spend £37.4bn in 2010/11, of which £32.2bn is earmarked for housing and support for local authorities. The remainder of the budget would be cut by 25% to save £1.3bn.
But that’s not all. There would also be a one-year freeze in CLG grants to local and regional government, saving almost £700m. ‘The recession has already put pressure on council budgets, with falling income and rising demand,’ they argue. ‘But freezing central government funding for local authorities at 2009-10 levels for one year will help focus minds across town halls further.’
And if these initial cuts of £42.5bn for 2010 are not enough to reduce debt, the TPA and IoD propose another one-year pay freeze across the public sector from 2011/12 and 5% pay cuts for the richest 10% in the public sector to save another £7.5bn.
None of that is party policy and this is only a report by two pressure groups but the debate on what and how much to cut has only just begun.
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Readers' comments (4)
St Alban | 11/09/2009 3:51 pm
Why go for these chicken feed savings when thinking outside of the box we have trapped ourselves in these past 20-years could deliver massive potential.
The big spenders, health and welfare, have expanded greatly in the effort to 'target' resources to those most in need. In terms of some benefit payments this now requires such an army of civil servents to assess and pay the benefit that the ratios of costing £4 to pay £1 of benefit is a conservative estimate. Returning to some universal process seems the only logical way to escape this costly blue-red tape expense.
We are beyond salami slicing as a cure, new thinking is required. In addition to removing cost heavy targeting simplification of taxation can remove the other army of civil servants employed to execute the multitude of ways to take money off of us.
Why are we paying £Billions in administrative procedures that simply are not required?
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worried well | 13/09/2009 5:25 pm
If anybody should go it should be the inspection and specification regime.
They add nothing to services and could go quietly without damaging the frontline services. No more inspection reports that don't assess quality... followed by recommendations about improvements that would not improve a paper bag.
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Jim Harvey | 14/09/2009 11:49 am
Let me get this straight. The problem: reckless lending and a pay boom in the financial sector lead to the banks being bailed out by the taxpayer. The solution: a pay freeze for public sector workers. I can see the argument about removing red tape but isn't that like tackling the crime by arresting the victim?
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St Alban | 14/09/2009 3:50 pm
Correct Jim, but these are right-wing pressure groups so you would hardly expect them to confess and come quietly; better to blame the victim and hand them the bill to-boot.
Meanwhile, the champagne is on us!
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