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Editor's blog Thursday 21 October 2010: Institute for Fiscal Studies on the 2010 Comprehensive Spending Review

The Institute for Fiscal Studies is the Judi Dench of public policy - a universally-admired, 24-carat National Treasure.

What it says matters, and is taken pretty darn seriously.

Chancellor George Osborne and his colleagues in the Coalition Government may well be unhappy that its review of the CSR broadly disagrees with the self-assessment by Restoration-faced Mr Osborne as "progressive".

(This will also create an interesting situation for the IFS's former head honcho Robert Chote, who has gone to head the Government's new financial-and-fiscal-stringency quango the Office For Budget Responsibility).

IFS acting director Carl Emmerson (who you will recall was a co-author with the iridescent Professor John Appleby of the Kings Fund's oft-quoted How cold will it be? report into NHS finance) opened the presentations with some remarks, including that "Mr Osborne said yesterday that – because of his cuts to welfare spending, and savings on debt interest by cutting borrowing more quickly, departmental spending over the four years starting next April will not be cut any harder than was planned by Mr Darling. But the new Government has already implemented cuts to spending in this year, thereby reducing the base for Mr Osborne’s comparison. So, by 2014–15 departmental spending is forecast to be below the level implied by the plans set out in Labour’s last Budget. And because this is true, any like-for-like comparison of spending in “unprotected areas” would also be higher in 2014–15 under the last Government’s plans than under the new Government’s plans".

Emmerson went on to observe that "the Treasury’s analysis shows that those cuts to public services announced yesterday that they were able to model will impact on those in the bottom half of the income distribution more than the top. So the Treasury’s analysis shows both the welfare cuts and public service cuts announced yesterday being regressive. But large tax rises for the very rich announced by Labour lead, on the Treasury’s estimates, to the overall fiscal consolidation hitting the highest income individuals the most".

What irony: the Labour policy legacy allows Osborne's claim that the CSR is "progressive" some credibility.

Rowena Crawford's presentation states that the NHS in England will get a 0.3% real increase on figures showing real change in total (resource + capital) DEL) over the period 2011/12-2014/15.

On her 'record-breakers' slide, she noted that in terms of real increases over the next four years, "NHS: tightest since April 1951 to March 1956".


Some record. Some breaking.

Crawford concluded that the NHS is to get a real-terms rise in spending, but noted that the CSR amounts to the "tightest squeeze on total spending since end of World War II
large cuts to working age welfare spending ... tightest 4-year squeeze on public services since April 1975 to March 1980".

A sobering thought.