By Judy Hirst
June 26, 2009
Local government expert Tony Travers has predicted a severe squeeze for housing and regeneration in the wake of post-2011 cutbacks to public sector capital investment.
Speaking on June 24, Travers said that, unless the private sector came back in to fill the investment gap, there would be ‘a big crunch’ in local economic development.
With up to ten years of 0.5%–1% real public spending growth, most departments outside health and education would be facing zero increases, he predicted.
This would have ‘profound implications’ for public attitudes to government, taxation, wealth and poverty after the previous years of plenty.
Hard choices would have to be made, involving more fees, charging and co-payments for services, along with an increase in outsourcing and partnership work.
‘More controversially, it could also involve means testing for services and ending some benefits for the affluent,’ he argued.
Gideon Skinner, research director at Ipsos Mori, told delegates there had been a 50% fall in economic confidence in the past two years, a higher fall than in many other countries.
‘But there is a disconnect between this national pessimism, and a slightly more optimistic view about the economy locally and about personal finances,’ he said.
There was also a feeling that ‘we’re at the nadir’ of the recession, and – correctly or not – ‘that things can only get better’.
There is ‘no real appetite for either cuts in public spending or tax rises’, said Skinner. Instead, eight out of ten people think the ‘magic wand’ of more efficiencies will be the way to avoid cutbacks in services.
‘There is no sign that the reality of the hard choices facing public services has really hit home,’ he said.
Nicola Hodson, Microsoft UK’s public sector manager, questioned whether the public sector was focusing enough on transformative services that could potentially make a difference in harsh economic times. She predicted that, with national politics in disarray, the focus would turn more to local power and local government.
June 26, 2009
Local government expert Tony Travers has predicted a severe squeeze for housing and regeneration in the wake of post-2011 cutbacks to public sector capital investment.
Speaking on June 24, Travers said that, unless the private sector came back in to fill the investment gap, there would be ‘a big crunch’ in local economic development.
With up to ten years of 0.5%–1% real public spending growth, most departments outside health and education would be facing zero increases, he predicted.
This would have ‘profound implications’ for public attitudes to government, taxation, wealth and poverty after the previous years of plenty.
Hard choices would have to be made, involving more fees, charging and co-payments for services, along with an increase in outsourcing and partnership work.
‘More controversially, it could also involve means testing for services and ending some benefits for the affluent,’ he argued.
Gideon Skinner, research director at Ipsos Mori, told delegates there had been a 50% fall in economic confidence in the past two years, a higher fall than in many other countries.
‘But there is a disconnect between this national pessimism, and a slightly more optimistic view about the economy locally and about personal finances,’ he said.
There was also a feeling that ‘we’re at the nadir’ of the recession, and – correctly or not – ‘that things can only get better’.
There is ‘no real appetite for either cuts in public spending or tax rises’, said Skinner. Instead, eight out of ten people think the ‘magic wand’ of more efficiencies will be the way to avoid cutbacks in services.
‘There is no sign that the reality of the hard choices facing public services has really hit home,’ he said.
Nicola Hodson, Microsoft UK’s public sector manager, questioned whether the public sector was focusing enough on transformative services that could potentially make a difference in harsh economic times. She predicted that, with national politics in disarray, the focus would turn more to local power and local government.
