Wednesday, October 20, 2010

The Spending Review: A Personal Response

I am a public sector worker, I am not on the coalface but I hire the people that work on the coalface. I agree that cuts had to be made and they had to be deep. I agree that they had to cut the Public Sector borrowing requirement down to size but not eradicate it.

However, I have no doubt that the coalition has gone farther than it needed to, due to the Conservative ideology of smaller government.

I do believe that we needed to make an across the board cut of at least 10%. I don't believe any area should have been ring-fenced including however unpalatable the NHS and education. It is time to live within our means. A significant amount can be saved in the public sector through efficiency saving and getting rid of "nice-to-have" services that have built up in the last ten years without affecting core services. 10% is I believe a fair line in the sand.

I think the public sector pay freeze is right even though in real terms it means many poorly paid workers will find it much harder. Again given the extreme circumstances we find ourselves in I feel a pay freeze is preferable to loosing more jobs.

I think any additional spending should be frozen, what we don't have now we no longer need. A lot of commentators have compared the deficit to your own debt, when you have a debt you need to reduce it. I would compare the budget requirements to a household budget, when money is tight you don't spend it on new things or reduce spending on food to move to a bigger house. You make do with what you have got and so it is time to make do with what we have got. When the good times come again then we can look for new opportunities.

I would not reduce corporation tax, big business got us into this mess they can help us out of it. The argument that this is to stimulate growth is valid but public sector spending and public sectors workers also contribute to the economy.

I would not increase International development, again referring to the household budget, I like to give to charity but I don't give more than I can afford. As a country we may have a responsibility to the rest of the world and that is why I would not make any reduction in the budget for international development but it would be frozen.

I would not give a rise to the cabinet office for their "big society" work. "Big society" is a good idea but it doesn't not need that much money. I would prime the pump but not to the extent of £1.8 bn perhaps £0.5 bn would be more appropriate. Government cannot order you to volunteer but they can encourage you.

I would bring forward the pension age increase, it makes economic sense.

I would increase pension contributions, although I acknowledge it will be painful the current system is no longer viable for individuals, the country or the economy.

I would not freeze the science budget but as per all other areas cut it by the required 10%. Sorry scientists everyone needs to do more with less and no one can be protected under these circumstances.

I would get rid of trident, we have no need for a nuclear deterrent that we would never use saving us £20 bn that could be better spent elsewhere.

With some significant regret I would not expand the funding for energy and climate change projects. Again we cannot afford the "nice to do" stuff, when things improve they can go back on the agenda. For now the £2.9bn could be better spent elsewhere. I would if the figures allowed allocate £200m for the wind power projects and £50m for solar power and energy efficiency projects. This would help continue the push to a green and sustainable economy. In this area alone I feel we must move forward not back.

I would not scrap the index linking for rail travel, those without cars would be the hardest hit.

The NHS is tricky but I would enforce my golden rule of 10% cuts with a stipulation that savings must be made from efficiency saving and cutting red tape and not closing wards or hospitals. That may be very painful but I would also commit that when the good times come back the NHS would be the first in the queue and I would aim for funding increases to a level equivalent of 5% per year for each year they received no increase. Over the long term there would be no reduction in funding.

There are other areas I could go into but I think you can understand extrapolate my thoughts.

On one final note the average savings across the board for the government have been 19%. I have said across the board saving will be 10% with some significant extra savings made which should allow us to head towards the 19% target. In addition, I do not believe we need to totally eradicate the deficit. Some deficit is acceptable as long as it continues to reduce and does not get out of hand.

I recommend my plan to the house.

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