Public spending is forecast to go up a little in cash terms next year and the year after, following the increases proposed in the July budget. As there is currently no CPI inflation and low wage rises in the public sector this means overall a real increase. Total spending is forecast to rise by £12 billion in 2016-17 and by £14 billion in 2017-18. This year it goes up by £6.8bn.
With substantial increases in health, welfare, and EU contributions, and real increases in defence and overseas aid in line with growth in the economy as a whole, this will mean some reductions in other programmes and departments. It is that time of year when the Treasury is looking for ways to get more for less or get the same for less, and when departments are meant to come forward with sensible ideas for being more efficient and cutting out less necessary or wasteful spending.
I have made some suggestion recently on this site and elsewhere. Network Rail’s budget is very wasteful and inefficiencies are large. It should be easy for the new management to save money and achieve more. The area of housing sees large double subsidies, to both homes and people. It should be possible to build, sell and rent out more homes without needing so much subsidy to the housing providers. The budget of the Climate Change department was increased substantially under its Lib Dem Ministers under the Coalition and should be able to manage with less.
The Business department has a large budget. Now Corporation tax is down and growth has resumed, it should be possible to reduce the amount of business subsidy being paid. An energy policy based on exploiting cheaper energy would also help. The two state banks run by the Business department should be expected to make some profits instead of requiring cash.
The government is in the process of seeking to control welfare bills. The two best ways to do so are to help more people into work and into better paid work, and to limit the numbers of new migrants coming to the country.
I look forward to your ideas for ways to bring the bills down.