Thursday 4 December 2014
Where will the cuts fall?
Yesterday’s Autumn Statement has completely dominated today’s news. Not a surprise.
But what is unclear about yesterday's Statement from the Chancellor is where cuts will be made in public spending after 2015. This morning’s FT makes clear that “renewed activity is failing to fill the Treasury’s coffers.” The situation is dismal: we have a surprising shortfall in future tax revenues, and the chancellor still aims to cut down the size of the public sector.
So cuts will continue, with few big tax rises in the offing. The BBC's head of statistics Anthony Reuben said public spending as a proportion of GDP would fall to its lowest level since the 1930s. Office for Budget Responsibility chairman Robert Chote called it a “very sharp squeeze”, of which around 60% is forecast to come in the next Parliament.
These cuts will have a profound effect on society, particularly the most vulnerable like the unemployed and people with disabilities. That in turn puts pressure on the third sector.
So what does this mean for us? There are 2 major effects. First, with spending protected in health and schools the brunt will fall on welfare and local councils. This will inevitably mean further cuts to support for charities, especially at local level. It also means further strains on the welfare system , with charities having to pick up the pieces. Increasingly, as ACEVO points out in our recently published ‘Free Society’ Manifesto, our sector has become ‘the other safety net’ for people and communities. But you can't increase your support for the vulnerable with less money. The system is already creaking and in desperate need of funding, as food banks and many disability charities will tell you.
We urgently need to know exactly where cuts will fall, and how the Government plans to protect the third sector. It’s not enough to delay the details until closer to the election, or even after next May. For now, we know the third sector will always be there in support and in defence of society’s most vulnerable. But without a modicum of political support, this situation cannot last for ever.