The worst of Britain’s spending cuts are still to come, a new study has warned.Government spending cuts set out for after the general election are the toughest out of 32 advanced economies, according to the Institute for Fiscal Studies (IFS).
Speaking in December’s Autumn Statement, Chancellor George Osborne said Whitehall departments faced real-term cuts of £51.4bn (14.1per cent) between 2015 – 2019.
That figure is on top of £38.2bn (9.5 per cent) of cuts over the past five years.
In its annual Green Budget report, IFS director Paul Johnson said UK public finances had a “long way to go” and accused Mr Osborne of failing to deliver on deficit reduction plans.
He said: “Mr Osborne has perhaps not been quite such an austere Chancellor as either his own rhetoric or that of his critics might suggest.
“And he has cut departmental investment spending by only half as much as he originally planned.
“The public finances have a long way to go before they finally recover from the effects of the financial crisis.
“One result is that he or his successor will still have a lot of fiscal work to do over the course of the next parliament.”
The cuts would mean public spending falling to its lowest share of national income since at least 1948, and fewer people working in the public sector than at any time since at least 1971.
But the report is optimistic about UK growth, estimating zero inflation and three per cent growth this year.
Andrew Goodwin, senior economist at Oxford Economics and co-author of a chapter in the Green Budget, said: “The prognosis for the UK economy is pretty upbeat”, and he predicted “a big turnaround in household finances” over the next year.