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Public debt now amounts to £799 billion, or 56.6 per cent of GDP. Meanwhile, tax receipts fell by 10 per cent in the past year, according to the National Audit Office.
The upshot is simple. To fund borrowing, let alone to reduce the deficit, there will have to be cuts in public spending, regardless of which party is in power. Quite what this means in practice is now becoming clear.
The Treasury website reveals, with understandably little fanfare, that spending will be cut next year in real terms by 0.7 per cent, or almost £3 billion. And that's just the start.
It means making choices about our priorities.
Some grand cultural projects will have to be put on hold, for one thing. The new wing of the British Museum, the Stonehenge visitor centre and the Tate Modern's extension are among the schemes that now look unlikely to be completed any time soon because of budget cuts at the Department for Culture, Media and Sport. Some of the proposals were good ones but they are all valid targets for initial cost-cutting — unlike, for instance, free admission to museums.
On a much larger scale, total education spending, according to Treasury figures, will decrease slightly overall and while spending on schools will increase marginally, this will be offset by 2.4 per cent cuts in universities, innovation and skills. The reduction, though small is politically significant. Education is one area, and health is another, which are meant to be ringfenced from cuts — and in an interview with The Sun today, David Cameron says he will protect “frontline services”. If this means that there would be sustained spending on teacher training, good, but there is no reason to maintain Gordon Brown's levels of capital spending on school buildings.
Similarly, both major parties have decided for good political, and bad economic, reasons that it would be electoral suicide not to protect the NHS from cost-cutting. Yet it is obvious that considerable economies could be made by resetting spending priorities within the service.
If there is a change of government next year — and the the Norwich byelection today may well presage a collapse in support for Labour — then it will be the Tories making the cuts. It bodes ill for London, then, that the party is refusing to guarantee funding for Crossrail, the long-delayed rail-link between Heathrow and Stratford. They should think again: this is productive spending, which promises to make the capital a more attractive place for business and will ultimately help raise revenue by bringing investment to London. Cuts are necessary but putting Crossrail on hold would be one cut too far.
Politics-free exams
Last year's Sats debacle meant that hundreds of thousands of young people were left waiting for exam results long after the initial deadline. The Commons schools select committee has said that one reason for the shambles was that the Department for Children, Schools and Families was too involved in the process.
Now, as we report today, the new exams watchdog, Ofqual, could ban government officials from attending its meetings in an attempt to assert its independence. This could set a useful marker. It is debatable that exam standards have been maintained in recent years — which has as much to do with the breadth of syllabuses and the importance of coursework as with marking — and the QCA, Ofqual's predecessor, did not inspire universal confidence. Politics cannot be kept out of exams, but there is a good reason why politicians should not micro‑manage the workings of the regulator. Giving Ofqual more independence may help it do a better job.
A London gateway
A Crossrail station at Tottenham Court Road would, according to new plans, transform the hideous environs of Centrepoint into a charming “gateway” to Oxford Street. Yet another reason to support Crossrail, then.
Reader views (2)
"will mean the demolition of buildings all over the West End, e.g. the Astoria"
The one that's half demolished? Don't be ridiculous, it's taken 42 years to get this far and people are at this minute employed in good jobs building an extremely useful project that will massively improve the transport system in London. Throw them out of work, why don't you. Throw away years of work and millions of pounds already spent. Some people just have no idea of reality.
We're not competing with other towns in the UK, Mike, we're competing with big cities worldwide, and making it harder to get around London is economic suicide.
- Tom, London, UK, 23/07/2009 10:48
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I think Crossrail should be cancelled as it is hugely expensive and will mean the demolition of buildings all over the West End, e.g. the Astoria. Also, you could build at least one new underground line at half the price of Crossrail which would also take the pressure off the system. And also, why do so many people have to live and work in London anyway? How about encouraging people to live and work elsewhere in the UK? There are plenty of nice towns and cities in England and London is already full to bursting point with stressed out commuters.
- Mike, Beckenham, 23/07/2009 10:14
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