Under pressure from many directions

摘要

Last week's jam today, gruel tomorrow Budget skated over some alarmingly optimistic assumptions about the mounting pressures on the public finances which are likely to surface in the next Spending Review. The Office for Budget Responsibility (OBR) warned in its economic and fiscal outlook that legacy costs of the pandemic and the backlog of non-virus public service activities like NHS operations and education could mean further cuts to non-protected departments such as local government. The huge sums allocated to fight the virus by 36% or £122bn in 2020/21. However, only £56bn (equivalent to a 15% increase on pre-pandemic spending) has been added to fund virus-related activities in 2021/22 and no provision for virus-related spending has been added to pre-pandemic plans afterwards. As a result, spending rises from 14.4 to 21.2% of GDP in 2020/21, but then falls back to 15.3% of GDP in 2022/23.