A Look at the Consequences of Public Spending Cuts
by Yasmine El-Geressi
In 2010 in response to the devastating global ﬁnancial crisis, the Conservative-Liberal Democrat coalition government embarked one of the biggest austerity packages of any major economy. The aim was to reduce the national deﬁcit through cuts in public spending. 7 years later, the amount of government deﬁcit is now roughly back to the level it was prior to the ﬁnancial crisis. But at what cost?
One of the trickiest encounters Theresa May had to endure during the snap general election campaign was when a voter confronted her over the disability beneﬁt cuts which resulted in her losing her carer. “The fat cats keep the money and us lot get nothing,” Kathy Mohan told the Prime Minister. “I want my disability living allowance back!”
Asked by The Independent at a campaign event whether she would rule out further cuts, Theresa may avoided answering the question directly, replying: “If you look at what we’ve been doing on disability beneﬁts, what we have done is look at focusing disability beneﬁt payments on those who are most in need. In fact we are spending more on disability beneﬁt payments than has been done by any government in the past.”
The shadow work and pensions secretary, Debbie Abrahams, said the changes implemented in 2017, which include limits on child beneﬁt and cuts to universal credit, would put a “terrible toll upon families across the UK”. A single mother with three children, who makes a universal credit claim after the new rules came into effect, would stand to lose £6.195 by 2019 compared with the previous rules, according to House of Commons library ﬁgures.
It appears that the Government may have underestimated the harsh impact of its squeeze. Research from the House of Commons Library indicates that, due to the rise in inﬂation, the measures introduced last year by George Osbourne, are now expected to reduce support by £13 billion over the next four years for working age claimants, compared with the ofﬁcial Government forecast of £9 billion. As a result, Shadow Work and Pensions Secretary Debbie Abrahams predicts that “the living standards of millions of families who rely on tax credits, child beneﬁt or other forms of social security will be put under even greater pressure.”
Britain’s most hard up may have been rocked with beneﬁt cuts that kicked in this year which targeted single parents, disabled people and 18-21 year olds, but the country’s welfare state has been on a diet for quite some time. Welfare spending fell by one percentage point of GDP when the coalition government of 2010-2015 tried to reduce the budget deﬁcit. George Osborne, the former chancellor, used cuts in working-age beneﬁts, which include Job Seekers Allowance, Income Support, Employment Support Allowance, Housing Beneﬁt and Child beneﬁt, as a way to balance the books, planning to reduce the overall welfare budget by £12 billion.
Despite warnings by the British Red Cross that the NHS is facing a “humanitarian crisis” following the deaths of two patients who were left to wait on trolleys in hospital corridors, the health service remains underfunded and overstretched.
While the NHS rejected claims of a “humanitarian crisis” in England’s hospitals, it is without a doubt under unprecedented pressure as demand is higher than ever. Last winter was the worst on record at A&E, with some trusts reporting increases in A&E attendances of more than 20% compared with the same time the previous year. Staffs shortages, urgent funding gaps, patient safety, staff pay, nurses using food banks, ward closures and A&E waiting times have propelled the NHS to the top of the public’s list of concerns. Many believe that it is no longer a matter of if the health service will break, but when. Last year, the body that represents hospitals across England issued a bleak and frightening warning that the NHS is close to collapse. The health service has not been able to adapt quickly enough to the increasing demands placed on it due to years of underfunding.
In an article in The Observer, Chris Hopson, the chief executive of NHS Providers, recalls the NHS’s deterioration in the 1990s, which at the time caused problems for John Major: “NHS performance rarely goes off the edge of a cliff. As the 1990s showed, instead we get a long, slow decline that is only fully visible in retrospect. It’s therefore difﬁcult to isolate a single point in that downward trajectory to sound a warning bell. But NHS trust chairs and chief executives are now ringing that bell. We face a stark choice of investing the resources required to keep up with demand or watching the NHS slowly deteriorate. They are saying it is impossible to provide the right quality of service and meet performance targets on the funding available. Something has to give.”
The “party of NHS,” as claimed by Chancellor Philip Hammond, have pledged an £ 8 billion rise in NHS spending over the next five years, promising during the election campaign that spending per patient will rise in every year of the next parliament. Their plans include raising funds from overseas patients by tripling their fees and prioritizing the issue of preserving the 140,000 NHS staff from the EU during Brexit talks. However, it is predicted that due to an ageing population and the rising costs of new treatments, this new budget will create a funding gap of £ 12 billion.
The government’s plans were met with reproach by health experts and policy analysts. The Health Foundation, a British charity which carries out research and policy analysis into health care, called the pledges “deeply disappointing.” The chairman of the British Medical Council responded saying “The Conservatives have been in power for the last seven years, yet this manifesto will do nothing to reassure patients and NHS staff that they have the vision the NHS needs or will deliver the funding to ensure its survival. The extra £ 8 billion touted in this manifesto for the NHS is smoke and mirrors – rather than extra money, this essentially extends the funding already promised in the 2015 spending review for another two years and falls far short of what is needed.”
This year’s wave of terrorist attacks prompted a great deal of reflection on policing, intelligence and counterterrorism and questions were asked of the security services and politicians. Jeremy Corbyn accused May, who prior to becoming Prime Minister was the longest serving Home Secretary since World War II, of short-changing the police and attempting to “protect the public on the cheap,” casting a harsh spotlight on the Tory government’s record on national security.
While former Chancellor George Osborne’s decision in 2015 to protect police budgets was extremely welcome, research by the Institute for Fiscal Studies found that total police spending had already fallen by 14 % a year in real-terms between 2010 and 2011, and between 2014 and 2015. According to official Home Office figures the total police officer workforce for England and Wales in September 2016 was 122,859. In September 2010, the year the Coalition took power, the figure was 141,850 – a fall of 18,991. According to a House of Commons Library briefing, if staff on a career break or maternity/paternity leave are excluded from those figures, the true figure drops to just 118,779, the weakest since March 1985.
Britain’s armed forces have also been devastated in the six years under the Conservative government. Army numbers have fallen from 102,000 to just below 80,000 – the weakest since the 1850s. The RAF and Royal Navy have also suffered similar treatment.
Theresa May defended her record by highlighting that despite the cuts, counterterrorism budgets had been protected, telling journalists at the headquarters of the Royal United Services Institute: “The commissioner of the Metropolitan Police has said that the Met is well resourced, and they are, and that they have very powerful counterterrorism capabilities, and they do. We have protected counterterrorism policing budgets.”
Though it is true that the counterterrorism budget has consistently risen, police and politicians warn that other cuts have hindered security. Both Labour and the Liberal Democrats argue that the falling numbers have made it harder to gather intelligence and therefore counter terrorist threats. Labour MP Chuka Umunna, a former member of the home affairs select committee, told the NewStatesman: “There’s no getting away from it: we need more police on our streets. All the evidence that I’ve heard from the Met commissioner is that, actually, the most important resource for gathering intelligence are your local policemen and women. Twenty thousand have been cut since 2010 and if you don’t have the numbers to gather intelligence then it makes it so much harder.”
Cressida Dick, the Metropolitan Police commissioner, has also made a call for additional funding to fight terrorism saying: “All of us need to look at the overall strategy, the tactics, the resourcing and indeed what we are doing within and with our communities. So there is whole load of things to review.”