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Tories Plan Savage Public Spending Cuts

Thursday, December 4, 2014

After Autumn Statement OBR Say Only 40% Of Cuts Made And A Further 60% Of Cuts Still To Be Implemented To Fill Cavernous Fiscal Hole

Services already cut by one third face cuts of another third and cuts of this order for law enforcement, armed forces, social and community services and public sector pay are not remotely realistic says GMB

GMB, the union for public service workers, commented on the extent of the cuts in public spending over the next Parliament that have emerged from the Autumn Statement. See notes to editors for extracts from the Executive Summary from the Office for Budget Responsibility's latest Economic and fiscal outlook published on 3 December 2014.

The Chancellor said in the Autumn statement that the coming years will require "very substantial savings in public spending" and a new Charter for Budget Responsibility will be published next week, with a House of Commons vote in the new year, to reinforce the commitment to deliver them. He added that public sector pay restraint in the next Parliament to deliver savings "commensurate" with the £12 billion achieved over the past four years.

Brian Strutton, GMB National Secretary for public services, said “Osborne’s forecasts on the deficit reduction have been dismal and his latest forecasts will be no different. Downgrading growth forecasts and downgrading tax rates add up to very deep cuts reducing public spending to the lowest proportion of GDP for 80 years.

The OBR say we are only 40% along the way with a further 60% of cuts still to be implemented to fill the cavernous fiscal hole. The public service spending cuts that have already happened have had a traumatic effect on elderly care, children's services and other basic support for our communities.

The services that have already been cut by one third face cuts of another third. Cuts in expenditure of this order for law enforcement, armed forces, social and community services and public sector pay are not remotely realistic.

Supporting further cuts is to condone more failures in services to the most vulnerable and needy in society and to undo the glue of a civilised society.

That is the harsh reality of the choice to be made at the next election.

GMB demands that the Chancellor come clean now and tell the British public exactly what services he would cut."

End

Contact: Brian Strutton, GMB National Secretary for Public Services on 07860 606137 or Cath Speight GMB National Political Officer 07506 711925 or Kamaljeet Jandu, GMB National Equality and Diversity Officer on 07956 237178 or Martin Smith, GMB National Organiser on 07974 251722 or GMB Press Office 07921 28988.

Notes to editors

Below are two paragraphs for the Executive Summary from the Office for Budget Responsibility's latest Economic and fiscal outlook published on 3 December 2014.

This publication sets out forecasts for the economy and the public finances, and an assessment of whether the Government is likely to achieve its fiscal mandate, supplementary target and welfare cap.

1.7 On the Government’s latest plans and medium-term assumptions, we are now in the fifth year of what is projected to be a 10-year fiscal consolidation. Relative to GDP, the budget deficit has been halved to date, thanks primarily to lower departmental spending (both current and capital) and lower welfare spending. The tax-to-GDP ratio his risen little since 2009-10. Looking forward, the Government’s policy assumption for total spending implies that the burden of the remaining consolidation would fall overwhelmingly on the day-to-day running costs of the public services – and more so after this Autumn Statement. Between 2009-10 and 2019-20, spending on public services, administration and grants by central government is projected to fall from 21.2 per cent to 12.6 per cent of GDP and from £5,650 to £3,880 per head in 2014-15 prices. Around 40 per cent of these cuts would have been delivered during this Parliament, with around 60 per cent to come during the next. The implied squeeze on local authority spending is similarly severe.

1.8 As Chart 1.1 illustrates, total public spending is now projected to fall to 35.2 per cent of GDP in 2019-20, taking it below the previous post-war lows reached in 1957-58 and 1999-00 to what would probably be its lowest level in 80 years. Receipts are projected to end the forecast broadly in line with their average share of GDP over the past 20 years.

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