Acareo Ltd

Focusing on the main thing!

The devil is in the detail

So, George Osbourne has had his day; the public sector, the media, social commentators and perhaps even “the general public” now know where the axe will be yielded – or do they? The Chancellor’s speech was big on headlines, but in line (dare I say) with his two immediate predecessors, very short on detail. As has become the norm of late, a plethora of background reports have been published today and it is in these reports that the detail is contained on exactly where the cuts will be made and to what degree. It is not all doom and gloom either – there are some significant announcements on investment for the future:

  • Health spending to rise to £114bn (actually a net loss in real terms
  • Rail transport (£14bn to Network Rail),
  • M-way improvments and the Mersey Gateway (£10bn)
  • rural broadband (£530m),
  • £5,000 towards the cost of a new ultra-low emission vehicle from January 2011,
  • £200m to local government for transformation
  • 150,000 new social homes to be built

to name a handful. However, how has the Chancellor managed to cut the overall spend by around £81bn (19%) and yet still find some money to invest? Which services are suffering and what will be the price we pay? Labour are already saying that this settlement will hit those least able to afford it the most – time will tell and they may well be correct. But, at first glance, a large cross section of us will be paying:-

  • Retirement age to increase to 66 by 2020 – affects all of us of working age
  • Incapacity Benefit/Employment Support Allowance to be restricted to 12 months whereafter, if you dont qualify for Disability Living Allowance, you go onto Job Seekers Allowance – affects around 1 million claimants and may impact adversely on men from manual labour backgrounds
  • Local authority budgets to be cut by 7.1% per annum for four years (28% in total) – will affect all of us to some extent but impact will vary locally
  • Police and fire budgets cut by around 13%
  • Estimates that 490,000 public sector jobs will go within 4 years – a net cost of around £8.5bn to the economy in terms of reduced spending power
  • Child benefits to end for higher rate tax payers, regardless of total household income (do I make my partner a co-director of my company so she can receive half the company dividends ergo we keep our Child Benefit?)

Will efficiencies through moderising working practices, removal of non-value adding processes, sharing service delivery and infrastructure be enough? Of course not, but they will certainly help public bodies transition through the next four years with less pain for their citizens. The Spending Review Report states that government will utilise digital channels as the default for service delivery wherever possible. Whatever the rights and wrongs of this, it is a big statement for such a short sentence. However, what it does do is offer up the opportunity for significant change with local government being given a £200m pot to pump prime such change. There is an issue about how that money will be distributed and expected benefits realised – too many of the existing funding routes are tarred with failure to deliver anything meaningful. Failure to do so again and grasp the opportunities to be seriously radical about how we deliver public services to our needy citizens will be a failure of responsibility amongst the decision makers. The 16 pilots for place based budgeting have a huge responsibility to make it work and identify what is possible – I wish them every success (and if anyone needs any help please shout!). The alternative of mistakenly slicing the sausgae into ever thinner slices may keep the bean counters happy but anyone taking such an approach will have failed their public and in doing so, failed in their duty.


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