Pundits predict 'hard choices' for the public

By Judy Hirst

25 June 2009

Policy experts have predicted that the public will soon have to wake up to 'hard choices' in response to 'once in a generation' economic conditions.

At a session asking 'what next for public services?' at yesterday's conference, local government expert Tony Travers said that there would be ten years of 0.5% to 1% real public spending growth. He added that most departments - outside of health and education- faced zero increases and this would have 'profound implications' for public attitudes to government, taxation, wealth and poverty.

Hard choices would have to be made by whoever was in government, he said. These might involve more fees, charging and co-payments for services, along with more outsourcing and partnership work.

'More controversially, it could also involve means-testing for services,and ending some benefits for the affluent,' he argued. Th ink-tanks were actively discussing these and other options.

Travers expressed concern that local economic development could be hit by the drying up of public sector capital investment between 2011 and 2014. 'If the private sector doesn’t come back in to fi ll the gap, there will be a big crunch in housing and regeneration,' he said.

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 is 'no real appetite for either cuts in public spending or tax rises', he added. 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.

Meanwhile, 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 these harsh economic times. A joint survey with CIPFA had pointed to the need for finance directors to take a more proactive approach, she said.