Analysis from CIPFA and the Institute for Government (IfG) suggests that most public services do not have sufficient funding to return to pre-pandemic performance levels by the time of the next election.
Performance Tracker 2022 reviews the state of nine public services – general practice, hospitals, adult social care, children’s social care, neighbourhood services, schools, police, criminal courts and prisons. It has been produced ahead of the government’s Medium-Term Fiscal Plan, scheduled for 31 October.
The report finds that the projected 3.4% per year average budget increases set out in the 2021 Spending Review have fallen – due to inflation and higher than anticipated pay awards – to 1.5%. It suggests that this is “unlikely to be enough to meet growing demands and deal with the aftermath of Covid in most services”.
In particular, the spending settlement for local government is said to be “no longer sufficient to meet demand” in social care and neighbourhood services.
According to the report: “There is no meaningful ‘fat’ to trim from public service budgets. If the government wishes to make cuts in the Medium-Term Fiscal Plan, it must accept that these are almost certain to have a further negative impact on public services performance.”
Writing in the report’s foreword, Hannah White, IfG director, said: “We hope this report will help [the government] prioritise. What will be clear from reading it, though, is that there is no low-hanging fruit if the government wishes to make cuts.”
Across the nine public services, the total cost of pay awards in 2022/23 is estimated to be £3.4bn more than the 2-3% increases anticipated in the Spending Review.
However, the report adds: “Even this understates the effect of pay pressure in the public sector because many local government services are contracted out and suppliers will be experiencing pay pressures that they will pass on to local authorities.”
It also points out that the government’s projections of local government spending power are based on council tax increases of 3% per year, which may prove “politically unpopular and so difficult to deliver” given the wider cost-of-living crisis.
—————
FREE weekly newsletters
Subscribe to Room151 Newsletters
Room151 LinkedIn Community
Join here
Monthly Online Treasury Briefing
Sign up here with a .gov.uk email address
Room151 Webinars
Visit the Room151 channel
