Time for Change - the end of austerity

Author
Report type
Research and reports
Issue date
12 Mar 2018
Key findings

Far from addressing the UK’s debt, austerity has hobbled the nation’s economic revival while at the same time causing significant damage to public services and those that rely upon them.

The time has come to accept that austerity cannot deliver economic or social progress and instead to adopt a different approach. Our public services should be viewed as key assets. As such we should recognise the vital role they play, but also the economic returns they can deliver. Instead of seeking to cut them to the smallest amount we can, we should establish the level of funding needed for them to deliver a decent service and commit to providing that funding.

In doing so, we will not only create a suite of services that truly provide a civilised quality of life for everyone who lives in the UK, we will generate the level of growth that has escaped us until know, and that our economy needs.

A decade of austerity has taken its toll. Public services are at breaking point. Our public service workforce is facing a crisis of morale, recruitment and retention. Cuts to public services are impacting hardest on our most vulnerable communities and intensifying inequality. And our economy continues to lag behind our competitors, with low levels of investment and prolonged weakness in aggregate demand exacerbated by public spending cuts.

Persistent low growth since 2010 has provided lower than expected tax receipts leading to a significantly lower pace of deficit reduction than the government planned for and no reduction in the public debt ratio.

And while the cyclically adjusted current budget deficit is expected to move into surplus, this does not mean the concerns regarding public finances are resolved. Public service cuts are currently expected to continue until 2022-23, and this is likely to further harm the economy not least given the likelihood of rate rises and the approach of Brexit.

Starting with the Spring Statement in 2018 and looking ahead at the next Spending Review period, the government must signal a change of direction. If the UK is to equip itself to meet the challenges and opportunities of Brexit and a new role in the global economy, we need the government to invest in our economy, our communities and our public services.

This report sets out the case for a change of direction. We make the case for investing in our public services to address the growing crisis affecting those services and the workers that provide them. We set out how that investment in public services is good for our economy. And we argue that through growing the economy and making different fiscal choices, we can afford this investment.