I was recently invited to contribute to two New Economics Foundation (NEF) workshops in London and Birmingham on the theme of ‘beyond austerity’.
Given the general election result on May 7 and the government’s stated policies, I have been pondering what realistically can be beyond austerity for at least the next five years.
However much we may wish the government to adopt a different and progressive public expenditure and investment-led macro-economic strategy, realistically, this is simply not going to happen as long as the current government holds to its current position and remains in office.
The next two years will see public expenditure cuts even greater than over the last five years, even though many (perhaps not the even the majority) of the last spending review-driven cuts are yet to fully realised. The extraordinary Budget on July 8 will confirm the government’s direction and speed of travel in advance of the new spending review itself, but it would appear that in unprotected departments and services, government is actually going to impose additional ‘in year’ cuts – this financial year.
The government has yet to allocate all of its planned cuts in vital areas such as welfare and in-work benefits. The IFS has stated that it will be very difficult to find an additional £12bn without some serious consequences, and there will inevitably be knock-on effects on other public services, as well as on families and communities.
Taken altogether, there would seem every reason to be gloomy and pessimistic, especially for these unprotected spending areas (and, I both suspect and fear, many that are meant to be protected).
‘There is an on-going political campaigning role to challenge the orthodox view that austerity and cuts are inevitable and unavoidable’
So what can be done by those responsible for sustaining public services in the public sector but also in wider civil society? And by those who continue to wish to make the case for tax-funded public services and redistributive taxation and public expenditure?
I believe that there are several strands that the response should take.
There is an on-going political campaigning role to challenge the orthodox view that austerity and cuts are inevitable and unavoidable. As has been seen in other European countries and in the UK, this can secure some political traction but, in the UK, at least as long as the current government is in office, this is unlikely fundamentally to change the government’s policy. This is no reason not continue to promote powerful responsible alternatives to austerity. There needs to be powerful political campaign for anti-austerity policies based on different values and principles.
There is also a duty for public sector and civil society leaders to explain the consequences of further cuts, just as the Local Government Association is now doing. This should include demonstrating not only the immediate impact but the long term social, economic, environmental and often financial consequences of sustained cutting.
The public sector beyond Whitehall has to find a strong and consistent ‘voice’ to speak up for public services. It has to form alliances with wider civil society, trade unions and the business sector that relies heavily on sound public services to flourish and grow. Collective voices are stronger than individual ones, and common messages are needed.
The voice of charities and others must also be louder on this agenda.
There is also a responsibility on public sector leaders – politicians and executive officials – and especially in local government, to both explain why they are being forced to make cuts but also to seek ways to mitigate these and their impact.
Inevitably, there will be some scope for efficiencies, and savings can often be made by smarter working, shared services and combining organisations. And these initiatives should always be pursued with serious vigour, even in times of plenty. However, the reality is that they are not going to be sufficient to plug the ever-growing funding gaps across the public sector.
So, it will be necessary to: stop doing some things; do others in very different ways; and in some cases, to consider charging or rationing access even more than may be the case today. The extraordinary Budget will confirm in stark and brutal fashion) that public sector leaders have absolutely no choice but to explore such approaches – and to do so immediately.