If you want to manage something, then measure it. We should be hearing monthly on the progress with reducing the growth rate of spending, increasing tax revenues and cutting the deficit, in line with the plans.
Just to get the ball rolling, I reproduce beneath the Treasury figures for spending (total current) since the Coalition government started in May, compared to the same period a year earlier under Labour. The figures show that total current spending has run 7% higher than last year, to the end of November.
Total current spending, £ billions
May 2009 47.4 May 2010 50.7 plus 3.3 (7%)
June 2009 47 June 2010 49.7 plus 2.7 (5.7%)
July 2009 46.9 July 2010 49 plus 2.1 (4.5%)
August 2009 44.9 August 2010 48.5 plus 3.6 (8%)
September 2009 46.0 September 2010 50.6 plus 4.6 (10%)
October 2009 47.6 October 2010 49.3 plus 1.7 (3.6%)
November 2009 48.6 November 2010 53.9 plus 5.3 (10.9%)
Total 328.4 351.7 plus 23.3 (7%)
The figures remind us that the deficit reduction strategy relies on higher tax revenues, not on spending reductions overall. Whilst some individual areas have been cut in real terms and some even in cash terms, the overall trend of current spending growth this year has been one of strong growth in cash terms, with a real increase of around 3% depending on your choice of inflation index. Capital spending has been reduced, which takes a little of the pressure off the deficit. With the exception of October, the growth rate of spending has been accelerating over this financial year.
The main weapons to tackle the deficit will be the higher VAT rate, higher fuel duties, higher National Insurance, and the estimated increased taxes from growth and inflation. As the higher taxes come due, so the questions about value for money and the choices made over public spending will become more insistent from a public worried about the impact of the taxes on living standards. We have seen this recently with the criticisms of the rising fuel price.