"The Chancellor's economic illiteracy is damaging our public services, our public finances and our economy" - Spending Review 2015
There was a small but significant current of thought in the last Parliament that perhaps the impact of the spending cuts would not be quite as bad as expected. That perhaps they had worked.
That would be worth consideration if it wasn’t based entirely on a narrative that was compelling but utterly baseless. The deficit target had to be revised three times, national debt tripled and personal debt spiralled.
In real terms the Local Government budget on the morning of today’s spending review is 50% of what it was in 2010/11. Fifty percent. From teams of twenty five - safeguarding our most vulnerable citizens, the cornerstone and principle of adult social care - in many councils today we are down to just four or five. There can often be just a single social worker on call for an entire region and those cases previously classed as “crisis” are having to be handed over to the health service.
So those previously dealt with in the community are passed off onto an NHS already under unprecedented pressure and so budgets have to increase.
So it is true that you can cut the budgets of adult social care by 50% but let’s not pretend that the vulnerable don’t suffer and that it does not have unintended funding consequences – harming the deficit reduction target.
Housing benefit changes and the Bedroom Tax, for instance, left people saddled with an effective fine for failing to move into smaller accommodation – despite the fact there was none to move into. 60% of those hit by the Bedroom Tax fell into arrears and only 4.5% actually downsized to avoid the tax. More debt for individuals.
And on justice where 660,000 people have lost access to Legal Aid. The Law Society said that there can be “no effective rule of law without a fully accessible judicial system”. And despite gross savings of £239m in the Legal Aid budget, the knock-on cost in increase in mediation and other services meant that the government lost £139m of that.
Of course, it didn’t end there; the stalled electrification of the ageing railways reducing business investment in cities across the North; decline in research and development; cuts to infrastructure spending reducing GDP in the long run; the teacher recruitment and retention crisis meant a dramatic rise in agency fees which provide supply teachers; staggering police cuts impacting on the health and social services.
The track record of the Government in forecasting the deficit is abysmal. It is failing to decrease at the predicted rate because the cuts made by the Chancellor are not happening in a vacuum – they are having very serious knock-on effects on other services and on individuals who cannot afford to pay.
That is exactly why – fresh from missing three deficit reduction targets – in the first year of this Parliament he looks on course to miss it again with October’s borrowing 16% higher than a year earlier.
And it is with that background that Osborne is preparing to announce what the IFS call the “deepest cuts in history” which will radically change the state.
Reports that he will force all housing benefit claimants to pay 10% of their rent affecting a staggering 4.8m households losing an average £570 per year. These are not only socially damaging, but economically illiterate.
There is no rhyme or reason to the Chancellor’s cuts other than a pursuit of a surplus target which almost everyone agrees, with borrowing rates at record lows, is anything between unnecessary and downright damaging.