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The departments that have been cut have coped admirably. The council grant was cut by 40 per cent, yet polls show no drop in satisfaction with services. The police budget is down by a third, but surveyed crime has fallen even more steeply. The education budget is down, but secondary schools are opening at the fastest rate for decades — with 500 more free schools on the way. Just as Labour’s spending splurge did not really help public services, five years of austerity has not really hurt them. And this is, in large part, thanks to the resourcefulness of the public servants in those departments.
The Chancellor ought to have congratulated them. They have demonstrated that cuts need not mean worse service. And by doing so, they illustrate an important point: that ‘protecting’ a department does not necessarily mean pouring more money into it.
Take the NHS, for example: its budget has not only been protected but increased — it is set to rise by £19 billion, to £120 billion over the next five years. But as a result it has not been forced to be as resourceful as other branches of government. Free prescriptions and GP visits are still given to people who could easily afford to pay for them, and basic disorganisation still means the NHS pays through the nose for part-time doctors. Being ‘protected’ has left the health service far too dependent on the government. And sheltered from the need to reform.
Had the NHS not been ringfenced, the austerity era might now be over — and the NHS might well be in a stronger as a result. The universities were not ringfenced at the last election, and radical tuition financing reform was introduced with fees of up to £9,000. But this also forced universities to innovate, and use about a third of the fee money to support poorer students. As a result, more English students from poorer backgrounds are going to university than ever before.
Perhaps the best single decision made by the Chancellor was to abandon his plan to cut tax credits, and instead phase them out — precisely as this magazine argued he should do. Such a move would have deprived the Conservatives of the right to refer to themselves as the ‘workers’ party’. They can still claim this title — just. But it would never have come into question had pensions not been ringfenced, at the expense of support for those of working age.
The Chancellor’s decision to spend £80 billion more makes one key assumption — that there will not be another crash. So far, he has borrowed as much as the market allowed him — and he plans to carry on doing so. In other words, his plan for the next five years is a massive gamble on there being no more boom and bust. We can only hope that he is right.
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