Making the case for public spending: A Touchstone Extra publication

Making the case for public spending – a report published by the TUC and commissioned from the Fabian Society – warns that severe spending cuts are already undermining public service quality, and that if the Chancellor doesn’t rethink his plans to cut spending further, public service outcomes are set to plummet.  Author Robert Tinker writes public spending cuts have led to strained public services, less provision and longer waiting times for key services.

The report details how:

• Funding cuts to adult care services in England resulted in local authorities being unable to provide care to over half a million fewer adults (29 per cent) in 2013 than in 2009.
• Lower health spending growth resulted in the number of people waiting for a week or more to see a GP rise by almost 50 per cent between 2012 and 2014.
• Local government spending cuts resulted in the number of Sure Start centres falling from 3,631 in April 2010 to 3,019 in June 2014.

And warns that if spending cuts continue as planned there will be:

• Major recruitment and retention problems in the public sector. The report says that further years of pay restraint will make it a struggle for hospitals, schools and other essential services to keep their best and most dedicated staff.
• A negative impact on UK growth. The report says that public spending cuts made over the last Parliament suppressed demand and led to the UK having its slowest recovery on record. Additional cuts would risk reducing economic output again.

The report warns ministers against “fixating on the size of the state” and says that public money is “critical to social and economic stability”.

Setting out the key economic and social benefits that public investment brings the report reveals how UK public spending was very much in line with other countries leading up to the financial crash and that many economically successful international competitors spend more on services and social support than the UK.

In the decade before the financial crisis, public spending in the UK moved from a very low base in the 1990s in line with the likes of Germany – but still well below Nordic countries.

This increase in funding helped reduce NHS waiting times, which had increased by 50% between 1988 and 1998, and helped drive up educational standards, says the report.

Making the case for public spending says that investing public money will lay the foundation for future growth and prosperity. It highlights that for every £1 spent on infrastructure economic activity is boosted by £2.80.