On the scope for cutting public spending

Currently, the major political parties in Britain seem to agree that some cuts in public spending are required in order to help bring the soaring, post credit-crunch, budget deficit under control. However they are reluctant to indicate exactly what they will cut and are also reluctant to imply that any major cuts will be made this year (let alone this side of the election which must be held by the summer). The most you tend to get is the mention of a few specific items adding up to at most a few billion (a small percentage of total spending).

This reluctance is understandable. For much of the time since 1997, if a party (usually the Tories) talked about spending cuts, especially if they start attaching figures to the desired levels of cut,  their opponents (usually the government or the Labour party) will ask how many doctors, nurses, teachers, policemen, schools or hospitals will be scrapped, or claiming it will lead to some scary number of them being scrapped, as if any significant cuts in public spending must necessarily hit frontline public services. The political tactic is to suggest to voters that any cuts must entail fewer schools, hospitals, doctors, teachers, etc, and thus those proposing cuts will endanger the services voters care about.

John Redwood, writing in the Telegraph, suggests that actually there may be more scope for cuts that don’t impact public services than debates on this issue usually acknowledge:

The good news is cutting public spending is technically easy when you look at just how much needless and wasteful spending there is.

Anyone saying you can cut without sacking a single nurse, doctor, teacher or uniformed person is usually ridiculed, but it is true.

Out of the 6 million state employees, only around 1 million are these essential front line workers.

Over the last few years public sector efficiency has failed to rise, whilst private sector efficiency regularly rises by 2.5% a year or more.

It is possible to do more for less in the public sector, by applying some of the disciplines of the well run office, shop or factory.

Further support for suggesting there is scope for cutting public spending without touching frontline services can be found in a graph on page 12 of the 2009 Pre-Budget Report. It lists the £676 billion worth of projected public spending for 2009/2010 broken down into the following categories:

  • Social protection £190 billion.
  • Personal social services £29 billion.
  • Health £119 billion.
  • Transport £23 billion.
  • Education £88 billion.
  • Defence £38 billion.
  • Industry, agriculture and employment £21 billion.
  • Housing and environment £30 billion.
  • Public order and safety £36 billion.
  • Debt interest £30 billion.
  • Other £72 billion.

I.e. there is £72 billion worth, over 10% of the total, being spent in addition to the budgets for education, health, industry, the environment, transport, public order and safety, social protection, personal social services, defence, housing and even the payment of  debt interest.

How much of this spending is necessary? Could we not make cuts here without harming front line services? This depends on what the £72 billion is being spent on. The notes in the chart explain: “Other expenditure includes general public services (including international services); recreation, culture, and religion; public service pensions; plus spending yet to be allocated and some accounting adjustments.”

I wonder how much of spending on recreation, culture and religion is really necessary?

What “general public services” are left after you factor the public services covered in the other major categories of spending?

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Posted in Uncategorized. Tags: , , . 2 Comments »

2 Responses to “On the scope for cutting public spending”

  1. Sabine McNeill Says:

    Dear James

    I was attracted to your blog thanks to the WordPress magic regarding the misleading about growth. I’ve noticed misleading about inflation before, but didn’t do anything about it. Now I’m supporting the Robin Hood Tax as a possible beginning of some reform.

    You may be interested in looking at my analysis of the budget over the last nine years on http://bit.ly/clsXo9

    With best wishes for your blogging elbows,
    Sabine
    Organiser, Foorum for Stable Currencies
    http://forumforstablecurrencies.info

    • jahammerton Says:

      Sabine,

      Thanks for your comment, sorry for the delay in replying and approving the comment. I will look at your analysis of the budget with interest. I intend to comment on the Robin Hood tax when I get a chance too.


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