Conservative program remains “silent” on ministerial spending cuts

The Conservative Party program failed to answer the question of where billions of pounds of cuts to unprotected public services would fall and added to the pressures departments face, the Institute for Fiscal Studies has warned.

The think tank said the Conservative government’s spending plans in the spring budget already involved cuts of £10 billion to £20 billion in unprotected departments, with commitments set out in the manifesto only increasing levels savings that the departments will have to make.

The Conservative manifesto promises £17 billion a year in tax cuts and a big increase in defense spending. It says these measures will be funded by downsizing the civil service, cutting consultancy spending, “quango efficiency gains”, cutting the planned £12 billion welfare bill and tackling tax evasion and fraud.

IFS Director Paul Johnson described the pledges as “concrete gifts paid for by uncertain, non-specific and seemingly victimless economies.”

Beyond this balancing act, Johnson said the manifesto had failed to indicate “where the £10-20 billion in spending cuts in unprotected public services, such as the suggests the March budget.

“Indeed, the billions in savings resulting from civil service downsizing and the rest indicated in the manifesto have been earmarked to finance additional defense spending and would come on top of these reductions,” he said. he declares.

Johnson added: “This manifesto is silent on the wider problems facing basic public services – and if you think these civil servants, management consultants and quangos have contributed anything, these plans imply an even tougher time than the one planned for March. »

Delving further into the proposals’ implications for public services, Bee Boileau, research economist at the IFS, said the manifesto had “left existing plans for overall levels of public service spending virtually unchanged after the election”.

She said the party’s commitments meant that by 2029-30 the department’s total spending plans would be topped up by £500 million, or “less than a tenth of 1% of the department’s total spending”.

Boileau said this would mean “significant real-terms reductions in day-to-day spending in a range of unprotected areas, many of which are still at lower real funding levels than in 2010”.

Making these cuts – in areas such as higher education, prisons and criminal courts – “would not be consistent with the desire to maintain current levels of service delivery, let alone make improvements”, a he declared.

“This is particularly true as a series of cuts identified in the Conservative Party program were intended to fund higher defense spending and therefore cannot now be used to complement spending plans elsewhere,” he said. he added.

Boileau also warned that the Conservatives had failed to clarify where the reductions in investment spending would be located, “since the plans were not presented on a ministerial basis.”

However, he added that one of the manifesto promises on school budgets could help reduce pressure on unprotected departments. The manifesto commits to protecting school budgets on a student-only basis. Boileau said the predicted drop in pupil numbers means it is possible school spending could be reduced by £3.5 billion, helping to reduce budget cuts facing other departments.

“Big questions about plausibility”

Also responding to the manifesto, the Resolution Foundation think tank warned that the plans “rely on £33bn of spending cuts in order to bring down the debt” – the £12bn of welfare cuts, plus his estimate of £21bn of cuts in unprotected departmental spending. will be necessary. He said these cuts would be necessary to meet the party’s goal of reducing the debt within five years – “which raises big questions about whether this tax and spending program passes the plausibility test” .

Mike Brewer, interim chief executive of the Resolution Foundation, said: “Given weak public finances, these new tax cuts build on previously announced tax rises, heroic efforts to reduce tax avoidance and £33 billion in combined cuts to disability benefits. and public services which will be extremely difficult to provide. This may explain why there are few details on these reductions.

“Big questions arise about whether doubling down on firm fiscal commitments, financed by promises of massive spending cuts in record time, actually passes the plausibility test, or whether this approach addresses the great economic challenge facing Britain faces when it comes to growth.”

The foundation also warned that plans to raise £6 billion from tackling tax avoidance and evasion, combined with the proposal to cut welfare spending by £12 billion, would require “heroic efforts by HMRC and the DWP”.

He also warned that fiscal risks, such as lower productivity growth, “could create a further £17 billion hole in these plans”. Brewer said: “The unspoken problem with this manifesto is that it will only take a small dose of bad economic news for these plans to break the budget rules and for the tax and spending plans of a future Conservative government are forced to go back to the drawing board.