Green Budget: cuts to public spending create uncertainty

Long-term planning could be tricky for many government departments as political parties set their goals for public spending. Rowena Crawford and Soumaya Keynes of the Institute for Fiscal Studies analyse the alternative green budget 

 

This parliament has seen substantial real-term cuts to departments’ budgets. In the December 2014 Autumn Statement, the coalition government confirmed its plans to cut departmental spending by 10% in real terms between 2010-11 and 2015-16. The plans also included further deep cuts beyond 2015-16, of 14% by 2019-20. 

If these are implemented then departments’ budgets will be on average over one fifth smaller in 2019–20 than they were in 2010–11.

What might this mean for departmental spending? To get a sense of the magnitudes involved, take the example of the government workforce as something departments spent a relatively large proportion of their budget on. Between 2009-10 and 2015-16, there are planned cuts to the general government workforce of around 500,000.

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