A report called for the political parties to publish transparent proposals on how they would manage public service funding cuts in their forthcoming election manifestos. It put forward three strategic options that government and the public sector should consider: redefining the relationship between the state and the individual; a significant 'de-layering' of the public sector with many more decisions taken locally with minimal oversight; and a major initiative to maximize economies by much more effective collaboration between public bodies.
Source: After the Downturn: Managing a significant and sustained adjustment in public sector funding, Society of Local Authority Chief Executives and Senior Managers, and Chartered Institute of Public Finance and Accountancy
Links: Report | SOLACE press release
Date: 2009-Dec
An audit report said that the public support provided to banks by the government was justified, given the scale of the economic and social costs if one or more major banks had collapsed. The final cost to the taxpayer would not, however, be known for a number of years.
Source: Maintaining Financial Stability Across the United Kingdom's Banking System, HC 91 (Session 2009-10), National Audit Office/TSO
Links: Report | NAO press release | Guardian report | BBC report
Date: 2009-Dec
A report set out the government's aims for the future of 'local spending reports'. The government said that it wanted to make it easier for citizens to look right across all the local services in an area, spot evidence of duplication or waste, and hold providers to account.
Source: Making Local Public Expenditure Data Public and the Development of Local Spending Reports, Department for Communities and Local Government
Links: Report | DCLG press release
Date: 2009-Dec
A think-tank report examined opportunities for 'progressive reform' in the tough financial environment – the 'age of austerity' – that was likely to dominate in the public sector for much of the following decade. Each contributor considered one aspect of the problem, or one area of public spending, and sought to identify opportunities for contributions to reducing the fiscal deficit that would not damage progressive aims.
Source: Carey Oppenheim and Tony Dolphin (eds.), Opportunities in an Age of Austerity: Smart ways of dealing with the UK's fiscal deficit, Institute for Public Policy Research
Date: 2009-Dec
A think-tank report said that the public sector workforce needed to be reduced by at least 1 million people (15 per cent of the total) if the structural public deficit were to be eliminated. Job numbers should be reduced by the greatest amount in the services that had seen the greatest increase, such as the National Health Service.
Source: Andrew Haldenby, Patrick Nolan, Lucy Parsons and Greg Rosen, The Front Line, Reform
Links: Report | Reform press release | BBC report
Date: 2009-Dec
The government published its 2009 Pre-Budget Report. The main proposals included:
• A temporary bank payroll tax of 50 per cent on discretionary bonuses above £25,000 awarded up to 5 April 2010.
• An increase of 0.5 per cent in national insurance contributions from April 2011 (on top of the 0.5 per cent increase already announced in the 2009 Budget statement).
• A freeze in the higher rate income tax threshold in 2012-13.
• In April 2010 the basic state pension would increase by 2.5 per cent; there would also be an above-indexation increase in pension credit minimum income guarantee.
• Increases of 1.5 per cent in child and disability benefits would be brought forward to 2010.
• Entitlement to free school meals would be extended to primary-school children of low-income working families, benefiting around 500,000 children.
• Young people aged 18-24 who had claimed jobseeker's allowance for six months would be guaranteed a job, work placement, or work-related skills training.
• The government would stick to planned levels of overall departmental spending in 2010-11, and public spending would grow by an average of 0.8 per cent a year in real terms from 2011-12 until 2014-15. Spending on the National Health Service, schools, and the police would be protected.
• £11 billion of savings would be made, including through limits on public sector pay increases and funding for public sector pensions.
• Public borrowing would be reduced to 5.5 per cent of national income in 2013-14: these plans would be embedded in legislation through the Fiscal Responsibility Bill.
Source: Pre-Budget Report: Securing the Recovery – Growth and Opportunity, Cm 7747, HM Treasury/TSO
Links: Report | Hansard | Tax rates and allowances 2010-11 | HMT press release | DCSF press release (1) | DCSF press release (2) | DCLG press release | DECC press release | DBIS press release | IFS briefing | Conservative Party press release | Liberal Democrats press release | TUC press release (1) | TUC press release (2) | CBI press release | CPAG press release | ECP press release | Save the Children press release | Sustain press release | CIPD press release | NUS press release | NHS Confederation press release | NHS Employers press release | LGA press release | ADASS press release | GuildHE press release | NASUWT press release | Voice press release | Shelter press release | CIH press release | CML press release | Local Government Chronicle report | Inside Housing report | Socialist Worker report | Telegraph report | Guardian report (1) | Guardian report (2) | Guardian report (3) | Guardian report (4) | Guardian report (5) | Guardian report (6) | Guardian report (7) | New Start report | Personnel Today report | BBC report (1) | BBC report (2) | Children & Young People Now report | Community Care report (1) | Community Care report (2)
Date: 2009-Dec
A report by a committee of the National Assembly for Wales said that the draft budget for 2010-11 contained no significant changes to previous spending plans in response to the economic downturn.
Source: Report on the Welsh Assembly Government Draft Budget 2010-11, Finance Committee/National Assembly for Wales (029 2082 5111)
Links: Report | NAW press release | BBC report
Date: 2009-Nov
A study explored the impact of the credit crunch on infrastructure projects. All those services and procurement approaches examined had been hampered and damaged: but the impact was uneven, with redevelopment- and housing-related projects being particularly badly impaired.
Source: John Layton, The Impact of the Credit Crunch on UK Infrastructure Projects: Commentary on an initial exploration, Centre for Public Service Partnerships/University of Birmingham
Links: Link removed
Date: 2009-Nov
A paper presented new estimates of how much the unit costs of public services, such as the National Health Service and schools, had changed compared with unit costs in general.
Source: Mike Phelps, Changing Costs of Public Services, UK Centre for the Measurement of Government Activity/Office for National Statistics (web publication only)
Links: Paper
Date: 2009-Nov
An audit report said that Scotland's public sector was under the greatest financial pressure in the ten years since devolution. The Scottish Government, the Scottish Parliament, and the wider public sector needed to make 'difficult decisions' about competing priorities and how best to spend tighter budgets.
Source: Scotland's Public Finances: Preparing for the future, Audit Scotland for Accounts Commission and Auditor General (0131 477 1234)
Links: Report | Audit Scotland press release | Scottish Government press release | BBC report
Date: 2009-Nov
A report said that the total net overrun on 240 key government capital projects was more than £19 billion. It said that future projects should only go ahead on the basis of a realistic assessment of cost: even more importantly, they needed to be managed competently.
Source: Out of Control: How the government overspends on capital projects, TaxPayers' Alliance (0845 330 9554)
Links: Report | TPA press release
Date: 2009-Nov
A think-tank report examined the history of investment decisions in major infrastructure projects, in particular transport and communications. A new approach was required that involved a much greater level of transparency about investment decisions, and a better industrial framework to enable private investment. Government departments and the private sector should be incentivized to value the long-term impact of projects.
Source: Nick Bosanquet et al., Road to Recovery, Reform (020 7799 6699)
Date: 2009-Oct
A think-tank report said that large budget deficits could plunge Britain back into an era of crumbling infrastructure. Local authorities needed to plan for a new environment of constrained capital allocations from the Treasury. Councils needed to be better prepared to raise capital in novel ways in order to meet critical investment needs.
Source: Tom Symons and Chris Leslie, Capital Contingencies: Local capital finance in an era of high public debt, New Local Government Network (020 7357 0051)
Links: NLGN press release | Local Government Chronicle report | BBC report
Date: 2009-Oct
A think-tank report said that around £500 billion would need to be spent by 2020 on renewing Britain's infrastructure, in order to improve competitiveness, stimulate economic growth, and meet the challenge of climate change. Given the existing size of accumulated government debt, the report recommended that as much infrastructure investment as possible should be undertaken by the private sector.
Source: Dieter Helm, James Wardlaw and Ben Caldecott, Delivering a 21st Century Infrastructure for Britain, Policy Exchange (020 7340 2650)
Links: Report | Policy Exchange press release | FT report
Date: 2009-Sep
A report outlined public spending cuts designed to save £42.5 billion a year from 2010-11, and £50 billion from 2011-12. Proposals included scrapping the Sure Start and 'Building Schools for the Future' programmes, the education maintenance allowance, the National Health Service programme for information technology, the identity cards scheme, and the raising of the compulsory school leaving age to 18. The report said that £12 billion could be saved by stopping paying benefits to people who did not need them, including: trimming child benefit, the Child Trust Fund, and the family element of child tax credit; and making sure only that elderly and disabled people who genuinely needed free bus passes got them.
Source: Corin Taylor, Ben Farrugia, John O'Connell, Mike Denham and Matthew Sinclair, How to Save £50 Billion: Reducing spending for sustainable public finances, TaxPayers' Alliance (0845 330 9554) and Institute of Directors
Links: Report | TPA press release | CPAG press release | Guardian report
Date: 2009-Sep
A report said that a prolonged period of cuts in public spending was in prospect. It called for an 'aggressive' and short-term review of costs, in order to buy time for the more fundamental changes that needed to follow – including the cancellation or scaling back of unaffordable and non-essential activities, and the radical redesign of the way in which public services were provided.
Source: The Challenge Facing the UK Public Sector: A KPMG prospectus, KPMG (020 7311 1000)
Links: Report | Local Government Chronicle report
Date: 2009-Jul
A think-tank report set out the steps that were needed to manage the public debt 'crisis' caused by the economic recession. These included the use of more index-linked bonds; a 'managed decline' in public spending; an increase in property taxes; a rise in VAT; and the abolition of the new 50 pence income tax band.
Source: Giles Wilkes, A Balancing Act: Fair solutions to a modern debt crisis, CentreForum (020 7340 1160)
Links: Report | CentreForum press release
Date: 2009-Jul
A report by a committee of MPs said that it was unclear whether major efficiency programmes within government departments represented real value for money. It recommended that the government establish robust data collection processes at the start of future efficiency programmes.
Source: Evaluating the Efficiency Programme, Thirteenth Report (Session 2008-09), HC 520, House of Commons Treasury Select Committee, TSO (0870 600 5522)
Links: Report | PCS press release | CIPFA press release | BBC report
Date: 2009-Jul
A think-tank report examined how decisions were taken when government departments were sharing out very large pots of money. Bids were assessed by committees that were described as 'independent', but which largely consisted of public sector employees directly involved with the outcome. The whole process was shrouded in secrecy: the public might not know who had been asked to tender, which proposals had been turned down, or why the winning tender was accepted.
Source: Mervyn Stone and Dennis Lindley, Failing to Figure: Whitehall's costly neglect of statistical reasoning, Civitas (020 7401 5470)
Links: Summary | Civitas press release
Date: 2009-Jun
A think-tank report said that the accumulated liability of unfunded public sector pension schemes was greater than the national debt. It said that the government had been using 'financially indefensible methods' to work out its liabilities and how much workers needed to contribute to the schemes.
Source: Neil Record and James Mackenzie Smith, Public Sector Pensions: The UK's Second National Debt, Policy Exchange (020 7340 2650)
Links: Report | Policy Exchange press release | Professional Pensions report
Date: 2009-Jun
A report compared the public sector occupational pension liabilities of the United States of America, United Kingdom, and Canada. In the UK, where unfunded schemes predominated, public sector pension liabilities were £1,177 billion – equivalent to 85 per cent of national income, and much higher than in North America.
Source: The Need for Transparency in Public Sector Pensions: A comparative study of occupational public sector pension schemes in US, UK & Canada, British North-American Committee (melanie.jones@underlinegroup.com)
Links: Report | BNAC press release | Personnel Today report | Times report
Date: 2009-Jun
An annual report was published showing the estimated outturn for public spending in the latest year (2008-09), and spending plans for the rest of the government's spending review period.
Source: Public Expenditure: Statistical Analyses 2009, Cm 7630, HM Treasury, TSO (0870 600 5522)
Links: Report
Date: 2009-Jun
A think-tank report said that government spending was growing far more quickly than in other countries, and faster than in previous recessions. The surge in spending was not being driven by the recession: at most 6 per cent of the increased spending was going on public works, and just over one-third was due to the rising cost of social security or debt. Instead of 'investment', most of the increase was due to a decision to spend more on consumption. The report called for an emergency Budget, and a public spending freeze.
Source: Andrew Lilico, Neil O'Brien and Adam Atashzai, Controlling Public Spending: The scale of the challenge, Policy Exchange (020 7340 2650)
Links: Report | Policy Exchange press release
Date: 2009-Jun
A think-tank report called for public spending cuts of £30 billion in order to tackle the government's fiscal deficit. Child benefit should be means-tested; doctors and National Health Service managers' pay should be cut by 10 per cent; winter fuel payments for pensioners should be scrapped; and graduates should pay a market rate for student loans, rather than having them linked only to inflation.
Source: Dale Bassett et al., Back to Black, Reform (020 7799 6699)
Links: Report | Telegraph report | FT report | Pulse report
Date: 2009-Apr
An official review identified a total of £15 billion in potential 'efficiency' savings in the public sector – from back office operations and information technology, collaborative procurement, asset management and sales, property, and local incentives and empowerment.
Source: Operational Efficiency Programme: Final Report, HM Treasury (020 7270 4558)
Links: Report | HMT press release | LGA press release | PCS press release | FT report
Date: 2009-Apr
The government announced (in the 2009 Budget) that it had set a £9 billion target for additional 'efficiency savings' in the public sector by 2013-14. Overall current public spending would grow by an average of 0.7 per cent a year in real terms between 2011-12 and 2013-14.
Source: Budget 2009: Building Britain's future, HC 407, HM Treasury, TSO (0870 600 5522)
Links: Report | Hansard | HMT press release | PCS press release | DH press release | NLGN press release | PWC press release | LGA press release | Pulse report | BBC report | Guardian report (1) | Guardian report (2) | Guardian report (3) | Telegraph report | FT report
Date: 2009-Apr
The government announced that it would provide £13 billion in loan support to private finance initiative projects, in cases where projects were finding difficulties obtaining sufficient debt as a result of the global credit crisis.
Source: Press release 3 March 2009, HM Treasury (020 7270 4558)
Links: HMT press release | DCSF press release | Greenpeace press release | CBI press release | BBC report | FT report | Inside Housing report
Date: 2009-Mar
A new book edition examined the ways in which healthcare, personal social services, education, housing, pensions and social security were funded.
Source: Howard Glennerster, Understanding the Finance of Welfare: What welfare costs and how to pay for it (2nd edition), Policy Press, available from Marston Book Services (01235 465500)
Links: Summary | LSE press release
Date: 2009-Feb
A report by a committee of MPs on the 2008 Pre-Budget Report called on the government to conduct a full public consultation on the design of a new fiscal framework, following the impact of the global financial crisis. It noted with concern that the 2008 Report contained no policy measures which would significantly advance the achievement of the 2010 child poverty target.
Source: Pre-Budget Report 2008, Second Report (Session 2008-09), HC 27, House of Commons Treasury Select Committee, TSO (0870 600 5522)
Links: Report | CPAG press release | PCS press release
Date: 2009-Jan
A report said that tax increases or spending cuts worth an extra £20 billion a year would be needed by the end of the following Parliament, in order to restore public finances to the condition set out in the 2008 Pre-Budget Report. Even if the action required were taken, it might take over 20 years for public sector debt to return to the levels before the global financial crisis.
Source: Robert Chote, Carl Emmerson, David Miles and Jonathan Shaw (eds.), IFS Green Budget 2009, Institute for Fiscal Studies (020 7291 4800)
Links: Report | IFS press release | FT report
Date: 2009-Jan