The cuts in Government spending which are still to come will be twice as big as anything experienced over the past five years – though the foreign aid budget will continue to swell.
Chancellor George Osborne has fixed a course that will return Britain’s annual spending back to the black by 2018-19. He then plans to end his austerity programme and, for the first time in a decade, begin to increase public spending again in time for the 2020 General Election.
However, in order to achieve these targets, the cuts which will be needed in the early years of the next Parliament will have to be far more severe, according to the Office for Budget Responsibility.
Across Whitehall, pictured there will be departments quaking in fear at the prospect of the Chancellor’s axe
Indeed, the independent forecaster says the ride will be so bumpy that it is best likened to a ‘rollercoaster’. Robert Chote, the OBR’s chairman, said the Chancellor’s plans implied that spending on Whitehall departments would need to be cut by £18billion in 2016-17 and £16billion in 2017-18.
Further cuts of £7.4billion would be required the year after – taking departmental spending down to £270.6billion, or £80.5billion less than in 2009-10.
The reduction in expenditure on public services, adjusted for inflation, is more than 5 per cent in both 2016-17 and 2017/18 – double the cuts seen in any year of the current Parliament.
Chancellor George Osborne has fixed a course that will return Britain’s annual spending back to the black by 2018-19
Across Whitehall, there will be departments quaking in fear at the prospect of the Chancellor’s axe.
The decision to ringfence spending on health, education and foreign aid in 2010 means the cuts have disproportionately fallen upon the Ministries of Justice, Defence, Communities (which provides money for councils and social care) and the Home Office and Foreign Office – which have seen their funding slashed by a fifth or more.
The Home Office has coped best, with crime falling to an all-time low. But police claim they can take no more – with officers in the West Midlands this week telling the public they might soon have to report offences online and then track the progress of the investigation themselves.
Prisons are at bursting point, and the MoD has cut the number of troops by 30,000 at a time of great global instability. Already there is horror on the Tory benches at the state of the British Army – which has no functioning aircraft carriers.
If Mr Osborne were to ask it to make even deeper cuts – or further slash the budgets for catching criminals – he might very soon have a full-scale revolt on his hands.
The Chancellor insists things are not quite as challenging as the OBR suggests, as there is still further fat – of about £12billion – that can be cut from the welfare budget, to mitigate some of the impact on Whitehall.
One thing is certain, however: the law which MPs have just passed forcing 0.7 per cent of GDP to be spent on overseas aid looks more absurd by the day.
Based on the OBR’s predictions, the growing economy means the foreign aid budget will rise to about £14billion in 2017/18, which, of course, is the year those deepest cuts of all are taking place at home.