By Colin Foster
On 22 March Gordon Brown delivered, as a City economist commented, a “steady-as-you-go Budget”.
Since 1998 the Government has regulated public spending by multi-year “Comprehensive Spending Reviews”. We are still in the span of the 2004-7 Review. The crunch will come with the 2008-11 Review, to be finalised in 2007.
Probably that will halt the increase in public spending since 1998, and so remove the padding which as yet softens the impact of the Government's manic “marketisation” of public services. The shape of it can be seen in the Health Service, where the Government is already trying to stall spending, and so financial pressures are driving many hospitals to cut treatments or staff, close units, or possibly shut down completely.
Brown saw a need to provide padding for the Government's drastic plans for schools, which still lie ahead, and so announced a rise in schools spending. How much help that will be to education remains to be seen, since it will be coupled with the Government's “marketisation” drive. Remember, the Government has doubled Health Service spending since 1997, but the main visible results are big PFI profits for contractors and a big rise in administrative overheads.
To offset the schools spending, Brown will sell off another £30 billion of public assets, limit public sector pay rises to 2.25%, and cut spending on four Government departments, including the Department of Work and Pensions, by 5% a year.
The civil service union PCS commented: “Gershon [Sir Peter Gershon, who produced a report recommending over 100,000 job cuts as part of the 2004 Review] said that to go beyond his proposals would harm the delivery of public services, yet this is what Gordon Brown is doing...
“Not content with pushing Jobcentre Plus to ‘catastrophic failure’ through crude job cuts, as reported by a House of Commons select committee last week, or seeing 21 million calls going unanswered across the DWP, as reported by the National Audit Office the week before, the Chancellor is further jeopardising those services...”