This weekend more stories have emerged about cuts in defence spending, featuring elements of the armed forces that are well-known to the public. Yesterday there were reports that the Ghurkha regiment is to be scrapped, today the newspapers featured reports that the Special Air Service is being forced to retire 40 of its most experienced soldiers and the Telegraph has revived a story about scrapping the Navy’s Harrier jump-jets.

Read more »

   Filed under: Blogging, Politics, Public spending | No Comments »

A new study by John Hills shows that the last government’s spending held back rising inequality and that cutting it is likely to be regressive. At the same time, an evaluation of the 1990s cuts in Sweden and Canada – often cited by the coalition as an inspiration – reveals that they led to significant increases in poverty and inequality.

I’m referring to a couple of articles by Daniel Pimlott that appeared on the Financial Times website this evening. Normally I’d just link, but as they’re behind a paywall, and they’re so excellent, I thought it would be worth briefly summarising them. Read more »

   Filed under: Public spending | 3 Comments »

People arguing the case for cuts will sometimes claim that recent international experience shows that “spending cuts adopted to reduce deficits have been associated with economic expansions rather than recessions.” The quotation comes from a paper published last year by Alesina and Ardagna (subscription) that lists examples where it is claimed that countries that carried out a large-scale deficit reduction were rewarded with economic expansion and a falling debt-to-GDP ratio.

A paper published yesterday by the Roosevelt Institute studies these examples and finds that they show nothing of the sort. In fact, cutting during a slump “often results in lower growth and/or higher debt-to-GDP ratios. In very few circumstances are countries able to successfully cut during a slump, and this happens only when either interest rates and/or the exchange rates fall sharply.”

Read more »

   Filed under: Economics, Public spending | 2 Comments »

The Government argues that cuts can be made in spending without damaging the quality of public services (as there is apparently so much waste that can be eliminated).  They also stress that these cuts will be fair and progressive and maintain that the most vulnerable will be protected.

However, our analysis of spending cuts announced so far (as reported in the Sunday Mirror) shows an emerging pattern of decisions that have been especially harmful for children and young people -  this group of people have been disproportionally affected by the cuts agenda.

Read more »

   Filed under: Public services, Public spending | 3 Comments »

So the Government has scored 47% in its interim performance test, based on its first three months in office. Who needs Alan Budd and the Office for Budget Responsibility when you have the kind of independent rigorous analysis kindly provided free of charge by the Taxpayers’ Alliance.

As an ordinary taxpayer I should probably take their analysis more seriously, though I shudder to think that anyone in the Government does. Read more »

   Filed under: Public spending, Tax | 7 Comments »

Tom Watson MP has written to the Prime Minister, asking him to publish the contents of the Ministerial Wine Cellar – something the Foreign Office has refused to do. In June, the Government spent £18,000 re-fuelling, and the stock is now worth £864,000.

Replacing it with a supply of Chateau Thames Embankment would pay for:

• The Alma Road Care Centre in Peterborough; or
• Delivering free school meals in Derby; or
• All the youth centres that are currently being cut in Sussex.

Trebles all round!

   Filed under: Public spending, They Just Don't Get It | 1 Comment »

I’ve just been looking through the latest edition of NAPO News (as one does) and found it illustrated perfectly the stupidity of the cuts. The magazine, produced by the National Association of Probation Officers, reports that this year’s Probation Service cuts mean that a number of probation trusts are going to have to reduce their staff, whilst others will introduce a vacancy freeze. If probation service and CAFCASS cuts in future years are twice as large – which NAPO expects – the union believes that “neither service will be in a position to fulfil its statutory responsibilities.”

Read more »

   Filed under: Public services, Public spending | 1 Comment »

The Comprehensive Spending Review could cut the armed forces by 16,000, taking “ hundreds of tanks, scores of fighter jets and half a dozen ships” according to “detailed proposals” passed to The Daily Telegraph’s defence correspondent, Thomas Harding. The RAF could be reduced to its smallest size since the Great War, “with fewer than 200 fighter planes for the first time since 1914.” (The RAF was created in 1918.)

Mr. Harding followed his exclusive, published on Friday, with a more subjective article the next day, worrying that “the way the forces are reconfigured is likely to be inadequate to fight the next war.“ He adds:

What if we need to take large swathes of territory to secure food, water and fuel?

Read more »

   Filed under: Public spending | 2 Comments »

One of the aspects of the coalition agreement that the TUC unambiguously welcomed was the plan to increase overseas aid spending to the UN target of 0.7% of GNI, and to put that commitment into law.

It wasn’t a surprising commitment because it had been the policy of both the Conservatives and the Liberal Democrats during the election (and Labour, for that matter). But it was welcome nonetheless because of the right-wing arguments against the commitment, which, it has to be admitted, leaves DFID as the only Government department not just with a ring-fenced budget but one which is guaranteed to grow.

However, despite pre-legislative scrutiny in the dying months of the last Parliament, there was no reference to such legislation in the Queen’s Speech, just a continued commitment to expenditure. Some in the development community smelled a rat. Read more »

   Filed under: International development, Public spending | 1 Comment »

I was struck by two items in the news that happened to appear on the same day. In the UK, Eric Pickles, the Secretary of State for local government, has announced plans to give the public the power to veto Council Tax increases. From 2012, MPs will decide each year on a maximum increase local authorities will be allowed to introduce, and increases over that limit will be subject to a referendum and a ‘shadow budget’ the Council would also have to produce. If the electorate voted against the Council’s budget, there would be a refund or a credit against next year’s Council Tax. (There will be no right to a referendum on cuts in services.)

On the same day I saw a report on California’s budget crisis, with Governor Arnold Schwarzenegger declaring a “fiscal state of emergency.” Read more »

   Filed under: Financial crisis, Public services, Public spending, Tax | 2 Comments »

In 2005, the Government’s Sustainable Development Strategy, Securing the Future, strengthened the Sustainable Development Commission’s role as an independent watchdog. It scrutinised Government progress, monitored its targets and primed public debate on anything from health inequality to the Severn Barrage. No longer. Gone for £4.5m. Instead of the SDC telling uncomfortable truths to Government, Government will monitor itself.  Read more »

   Filed under: Environment, Public spending | 1 Comment »

Here’s an important poll on attitudes to the cuts.

It was commissioned by the BBC for their Newsnight special on the coalition, from ComRes. The full tables are here.

I think the questions here are much better worded than those in the YouGov polls I linked to in my rather lengthy post on resisting the cuts (though I blame the clients – both ComRes and YouGov are good pollsters).

The results here are pretty consistent with the earlier polls though. Most buy the necessity for big cuts, but are beginning to be worried that they will be affected and that they might be going too far. What is new here is that a majority think they might be bad for the wider economy. Read more »

   Filed under: Public services, Public spending, polling | 1 Comment »