The Office of Budget responsibility now endorses what I have been saying for the last three years. Public spending is rising in real terms as well as cash terms. Here is the latest OBR Report on the subject:
“Real government consumption remains strong…The latest ONS data indicate that government consumption grew by 1.7% in 2012 in real terms. It continued to hold up 0ver the first half of this year (2013)…real spending grew by a cumulative 0.8% in the first three quarters…”
They also argue that employment declines in the public sector will be more than offset by rising private sector employment, and will increase public sector productivity:
“Relative to its level at the start of 2011…. we expect general government employment to fall by round 1.1 million by the start of 2019, with around 0.5 million having already taken place.”
Some of you have pointed out that EU spending apparently rises by £10 bn between 2013-14 and 2017-18. Any rise is unwelcome. As the OBR report makes clear, half of this revised forecast is the result of a change of accounting practice, which strikes the EU spending out elsewhere in the figures and puts it in in the EU contribution line. The underlying rises in forecast net of the accounting change are £1.3bn 2013-14, £ £0.6bn 2014-15, followed by £1.5bn, £1.2bn and £0.5bn, a total of £5.1bn.
The profile of EU contributions is erratic, falling to £7.3bn in 2014-15 from £8.7bn in 2013-14, rising to a lower figure than 2013-14 in the next two years before falling again to £7.3bn in 2017-18. The downward pressure on the Eu budget has helped, but the overall figures are still too high at a time when cutting spending in less desirable areas should be a priority.