Austerity leaves major challenges for Osborne

BrITAIn’S burgeoning population and an nHS funding crisis and could make George Osborne’s austerity plans even tougher after the election, an influential think-tank has warned.

The Institute for Fiscal Studies (IFS) said the Chancellor faced a “huge challenge” to meet his goal of returning the nation’s finances to surplus by 2018-19.

Just 40 per cent of the planned cuts will have been delivered by the end of this year – with the remaining 60 per cent to be pushed through amid massive pressures on key services.

The report also suggested the coalition could have made the situation worse with the speed and depth of austerity. The fiscal tightening is believed to have trimmed 4 per cent off growth – 1 per cent per year.

Andrew Goodwin of Oxford Economics, which worked on the report, said the curbs had probably been more damaging than ministers had expected.

The IFS found that, even with another £12 billion trimmed off welfare, the protection granted to areas like health implied cuts for other departments of 30 per cent since 2010.

IFS director Paul Johnson said: “returning growth, and forecasts suggesting we should be running a Budget surplus by 2018-19, should not lull us into a false sense that all is now well with the public finances.”

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