The Fiscal Challenge for Public Services event with Carl Emmerson

The Fiscal Challenge for Public Services event with Carl Emmerson
June 03 2014

Carl Emmerson, Deputy Director of the Institute for Fiscal Studies (IFS) joined members of the Public Chairs’ Forum (PCF) at a seminar in February to present an analysis of the current and future state of public finances. He then looked at the implications that this had for departmental budgets and discussed the issues with members.

The IFS are a leading independent microeconomic research institute that work on a range of issues including public finances, tax and welfare policy, education, inequality and poverty.

Carl discussed the continued squeeze on public spending, outlining the current situation and how this may change in the future:

- We are currently four years through a nine year fiscal consolidation.
- If the rest is implemented, and if forecasts prove correct, then government will be running a surplus in 2018–19.
- Perhaps the biggest risk is whether planned cuts to public service spending can/will be implemented.
- ‘Unprotected’ departments (NHS, schools and aid are ‘protected’) could be cut by 31.2% between 2010–11 and 2018–19 even if £12 billion is further cut to social security spending.
- The government is still announcing additional spending priorities. This increases the pressure on budgets by around £6 billion (2%).
- Demographic pressures such as an aging population mean increasing demand for services.
- For example a real freeze in NHS spending would actually be a 9.1% real cut in age-adjusted NHS spending per person.

Other areas discussed included:

- The impact of economic growth on public services spending.
- Changing pressures on public services.
- How public bodies can handle the continued squeeze on their finances.

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