Spending cuts will change state “beyond recognition”, says IFS

5 Dec 2014

The Institute for Fiscal Studies (IFS) has released its analysis of Osborne’s autumn statement. Paul Johnson, Institute for Fiscal Studies director: ‘‘We are looking at massive cuts in public services’’.

The IFS said that only £35bn of cuts had already happened with £55bn yet to come. This will constitute “a fundamental reimagining of the role of the state”. Johnson added, “One thing is for sure – if we move in anything like this direction, whilst continuing to protect health and pensions, the role and shape of the state will have changed beyond recognition”.

Government departments are expected to suffer an average 9.5% cut in real terms by 2015-16 after the schools budget, the NHS and international aid increased by 6.5%, and all other departments took a 20% cut.

It was also stressed that Osborne’s failure to eliminate the deficit by the end of the Parliament was not a result of the government holding back on spending cuts.

The deficit fell just £6bn to more than £90bn this year.

TUC general secretary, Frances O’Grady said of the analysis, “Buried beneath the Chancellor’s headline giveaways was a dire report on the state of the economy and the public finances.

“The IFS report lays bare the truth – the deficit is still here because the government failed on growth and wages.

“The Chancellor now wants us all to pay the price for his failure by cutting public services down to a stump with the loss of a million jobs.”