Wednesday, June 26, 2013
The spending round
Posted by David Smith at 03:00 PM
Category: Thoughts and responses

The Treasury insists it is a one-year spending round but many websites are calling it a review. Round or review, the least surprising part was George Osborne's announcement of 11.5 billion of additional cuts for 2015-16.

Of more significance were three other announcements. The first, a cap on overall welfare spending, excluding the basic state pension, will take effect from April 2015 and be policed by the Office for Budget Responsibility. It is intended to prevent welfare spending - part of annually "managed" expenditure - growing in an unplanned way. Time will tell whether it is achievable.

The second, the planned integration of health and long-term care, is seen by ministers as a logical response to the ageing population and the fact that the two parts of the service do not often work well together, so old people often block NHS beds, and some in care should really be in hospital.

Third, Osborne announced plans to end automatic pay increases for certain public sector workers. These increases have contributed to the fact that, despite a freeze on headline public sector pay increases, overall rises in public sector pay have outstripped those in the private sector in recent years.

Three potentially important reforms, though we won't know their impact for some time. The main spending round document is here: