Time for straight message on austerity
ANOTHER year and another cuts exercise is under way, it seems.
There were more disappointing public finance figures last week, this time for December. True, not every month has seen poor numbers, but the disappointments are outweighing the pleasant surprises.
Sometime between now and the end of June, Chancellor George Osborne will unveil detailed spending plans for 2015-16, and the word is that he is wrangling with Cabinet colleagues over an extra £10billion in cuts.
Whatever the right and wrongs of those discussions, this mini one-year spending review is something of an oddity. Not only does it involve decisions that will not take effect until after the next Election, but also it has been left until now, rather than being unveiled as part of the full review back in 2010.
There are a few important rules for the planning and delivery of difficult fiscal decisions and, based on present form, the Treasury is likely ignore all of them.
First, keep the number of announcements to a minimum, preferably one. It seems no one knows if the mini-review will be announced alongside the Budget in the spring, and rumour has it that later this year we will get a separate (and entirely notional, given the intervening Election) spending review covering the second half of this decade. Confused? You will be. Second, if the message is one of austerity – or even scarcity, as Nick Clegg suggested recently – then spending needs to focus ruthlessly on a handful of key areas. By contrast, the Coalition has more than 30 ‘priorities’, and its spending commitments range from school sports and space exploration to subsidies for mortgages and for the exports of smaller firms.
Linked to this is the third rule, which is to reduce rather than expand the list of goods, services and other desirables that the Government is held responsible for supplying. If previous administrations, including those in office during balmy economic times, resisted calls for this handout or that tax allowance, why would you give way now?
Ultimately, the one rule run- ning through all the others is the need for clarity, and that is what we simply are not getting at the moment. Is this an emergency administration grappling with scarcity, or a post-Cold War British Government with slightly less money to play with than its predecessors?
If the latter, then the Treasury should say so, and assorted baffling caprices, from getting involved in the troubles in Mali to fiddling with the recruitment of science teachers, would make perfect sense.
But if not, the suspicion will grow that ‘austerity’ is just an alibi for shifting spending to favoured recipients.
A Civil Service strike ballot opens next week. It might be an idea to get the message straight before then.
Read more at http://atkinson blog.mailonsunday.co.uk/.