Austerity: as you were

George Osborne has eased off on austerity, say the headlines. The targets he announced in yesterday’s budget are nowhere near as severe as the ones he came up with just before Christmas. His decision not to go for such a big surplus in 2020 has reduced the implied level of cuts to spending on public services.

Public service spending projections  

December 2014

Screen Shot 2014-12-03 at 13.56.30

 

Source: OBR Economic and fiscal outlook – December 2014

March 2015

Screen Shot 2015-03-18 at 13.53.22

Source: OBR Economic and fiscal outlook – March 2015

The OBR reckons an absolute surplus can be achieved in 2018-19 by reducing spending on day-to-day public services to 14.3 percent of GDP instead of the 13.3 percent forecast last time. And 2019-20 looks rosy by comparison to the December figures, now that the Chancellor has changed his mind about the surplus.

So has George Osborne called time on austerity Britain?

Not really. All this does is take us back to where we were last year, before the announcements in December.

Screen Shot 2014-12-05 at 08.20.47

Source: Crisis and consolidation in the public finances, OBR, September 2014.

The plans announced yesterday look less severe when compared to the Autumn Statement but they are not that much different from the ones in the budget last March. To achieve these targets would still mean more cuts to public services in the next parliament than we have seen in this one and, most likely, the collapse of some public services by the end of the decade.

This is no easing of austerity. It’s just a back-peddling on the fantasy land targets the government set before Christmas.

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4 Responses to Austerity: as you were

  1. sdbast says:

    Reblogged this on sdbast.

  2. Dick says:

    Austerity for the normal people but more money for the property investors..
    Is this the only remit for the BTL Tories? Just to prop the ridiculous housing market?

  3. Patricia Leighton says:

    Smoke and mirrors. You cannot plan for reductions on this scale before an election and not say where you think the cuts are likley to fall. We have such needs for skills development, improvements in productivity etc that 1p off beer is a joke,

  4. Reblogged this on small moves big changes and commented:
    You will note the Government priority given to reduction in public spending. Just to qualify what in real terms this equates to – Local Government spend makes up a large chunk of this expenditure (roads, schools, police) but it also relates to charitable support so this represents a serious challenge for any front line service providers e.g. those who provide support to the elderly, to children and to those with complex issues.

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