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Challenges and Choices in Public Spending Review: A Detailed Analysis

Explore the detailed analysis of public spending, highlighting the challenges and choices faced, based on data from reputable sources such as the Institute for Fiscal Studies and HM Treasury.

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Challenges and Choices in Public Spending Review: A Detailed Analysis

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  1. Public spending Carl Emmerson Institute for Fiscal Studies

  2. Total Managed Expenditure Source: HM Treasury

  3. Total Managed Expenditure Source: HM Treasury

  4. But remember this… “The Tory flagship policies are… to cut spending by £35 billion.” (Gordon Brown, 20 April 2005)

  5. Labour’s spending cut • Using Labour’s election campaign methodology, spending to be cut by: • £9bn over the three CSR years (0.6% of national income in 2010–11 terms) • £12bn over the three CSR years plus 2011–12 (0.8% of national income in 2011–12 terms) • Placing in 2007–08 terms • £8bn over the three CSR years • £10bn over the three CSR years plus 2011–12 Source: HM Treasury; IFS calculations

  6. Sharing the proceeds of growth Source: HM Treasury; IFS calculations

  7. A challenging spending review?

  8. A challenging spending review? Source: HM Treasury; IFS calculations

  9. What’s left for the CSR? TME in 2010–11 = £674.0bn Source: HM Treasury

  10. How much is left for health?With no additional resources for child poverty target 9 smaller departments Department for Constitutional Affairs Source: HM Treasury; IFS calculations

  11. How much is left for health?With no additional resources for child poverty target 9 smaller departments Department for Constitutional Affairs Source: HM Treasury; IFS calculations

  12. Where are the ‘cuts’?With no additional resources for child poverty targetNHS to get 3.4%p.a.; other to get 1.0%p.a. Source: HM Treasury; IFS calculations

  13. Matching private school spending “Our long-term aim should be to ensure for 100 per cent of our children the educational support now available to just 10 per cent” Source: HM Treasury

  14. More to do to close the gap Private spend = £8,000 Note: 2005–06 Prices Source: HM Treasury; IFS calculations

  15. More to close the gap? • Gap remaining would be £2,200 • To meet in 2010–11, would cost • £2,200 per pupil * 7.5m pupils ≈ £17bn • When would it be met assuming… • growth under CSR 07 (3.3%): 2020–21 • growth 1997 to 2007 (5.7%): 2016–17 • Private spending per pupil likely to grow? • state spending in 2005–06 at 1996–97 private levels

  16. Conclusions • Confirmed tight spending plans for 2007 CSR • Education spending not to grow as a share of national income • Tough choice for next Chancellor between NHS and other spending priorities • Plans could be subsequently topped up, but would require additional finance

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