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Public finances and council spending

Public finances and council spending. Paul Johnson SOLACE 16 October 2019. Tax and spend over the last two decades. Total spending. Borrowing. Revenues. Current expenditure. First current budget surplus in 17 years. Notes and sources: see Green Budget 2019, Figure 4.1.

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Public finances and council spending

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  1. Public finances and council spending Paul Johnson SOLACE 16 October 2019

  2. Tax and spend over the last two decades Total spending Borrowing Revenues Current expenditure First current budget surplus in 17 years Notes and sources: see Green Budget 2019, Figure 4.1 IFS Green Budget 2019

  3. Changes since March: Borrowing in 2020–21 Fiscal mandate (£46bn) Headroom or “Brexit war chest” £27bn £21bn Notes and sources: Figure 5.1, Green Budget 2019 IFS Green Budget 2019

  4. Changes since March: Borrowing in 2020–21 Fiscal mandate (£46bn) £5bn £21bn Notes and sources: Figure 5.1, Green Budget 2019 IFS Green Budget 2019

  5. Where is the extra spending going? Every department to see a budget increase in 2020–21 Notes and sources: See Figure 6.2 of the Green Budget IFS Green Budget 2019

  6. Keeping perspective: cuts since 2010 Since 2010–11: Real terms:−3% Real terms per person: −9% Day-to-day spending on public services Increases this year and next enough to reverse: Two-thirds of cuts to day-to-day spending since 2010 One-third of per person cuts Notes and sources: See Figure 6.3 of the Green Budget IFS Green Budget 2019

  7. Keeping perspective: 2017 manifesto plans Approx. Labour 2017 manifesto plans plus extra spending on the NHS Approx. Labour 2017 manifesto plans Javid 2019 Spending Round plans Hammond 2019 Spring Statement plans +£27 billion in 2020−21 March 2017 day-to-day spending plans Figures refer to day-to-day spending on public services. Full notes and sources: See Figure 6.8 of the Green Budget IFS Green Budget 2019

  8. In LAs Spending down 21% since 2009-10... Source: IFS (2019) ‘English council funding: what’s happened and what’s next?’ Council funding: what’s happened and what’s next?

  9. ... following big increases in 2000s 3.5% of GDP in 2009-10 2.3% of GDP in 2017-18 2.6% of GDP in 2000-01 Source: IFS (2019) ‘English council funding: what’s happened and what’s next?’ Council funding: what’s happened and what’s next?

  10. Large cutbacks in discretionary spending... Source: IFS (2019) ‘English council funding: what’s happened and what’s next?’ Council funding: what’s happened and what’s next?

  11. Large cutbacks in discretionary spending... Source: IFS (2019) ‘English council funding: what’s happened and what’s next?’ Council funding: what’s happened and what’s next?

  12. Large cutbacks in discretionary spending... • Core children’s social services only • Sure Start down 66% • Services for young people down 64% Source: IFS (2019) ‘English council funding: what’s happened and what’s next?’ Council funding: what’s happened and what’s next?

  13. Spending by LAs this year 4% up on 2017-18and could rise another 4% real next year IFS Green Budget 2019

  14. But current policy remains unsustainable Without additional sources of funding social care eats up an ever growing fraction of resources 3% council tax increases (referendum limit, excl. social care precept) 4.7% council tax increases (2019-20 average)

  15. Conclusions Public spending now on an upward trajectory Public finance realities may mean this is short lived Local authority spending power has been cut more than the average for public spending We have not reached a sustainable settlement for local government IFS Green Budget 2019

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