The government is on track to spend between £14bn and £17bn less each year on a range of public services from April 2022 than had been earmarked before Covid-19, says the Institute for Fiscal Studies (IFS)
The think tank has published new projections for the public finances, based on economic forecasts by Citi and warns that as the economy is recovering so quickly from the Covid-19 pandemic, it will force the Chancellor Rishi Sunak to cut public services by up to £17bn compared with the government’s pre-pandemic plans unless he takes steps to increase funding.
The IFS estimates that government borrowing will continue to fall from the levels it was at last year and is likely to fall at a faster rate than was forecast in the March 2021 Budget. The IFS now forecasts that borrowing will fall £30bn lower than the £234bn forecast figures from the Budget, at around £203bn or 8.8% of national income.
This is a value which has only been exceeded twice since the Second World War, most recently in 2020, and during the financial crisis in 2009−2010.
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