CIPFA wants to know how fiscal debt will be repaid
By David Williams
10 December 2009
Public officials are calling on the Cabinet and Opposition to reveal how they plan to close the fiscal gap, after the Pre-Budget Report underlined the depth of the crisis without fully detailing how it will be tackled.
A paper published jointly by CIPFA and the Society of Local Authority Chief Executives warned that the next government might have to ‘redefine the relationship between the state and the individual’.
After the downturn – managing a significant and sustained adjustment in public sector funding, released on December 9, also recommended granting more autonomy to local authorities and encouraging efficiency through collaboration.
CIPFA chief executive Steve Freer told Public Finance that the ‘dire’ deficit set out in the PBR raised ‘fundamental questions about the level of services we can afford. There is no doubt at all – this is going to hurt.’ He said the PBR had not spelt out exactly how the debt would be repaid. ‘The politicians haven’t yet coloured in, in detail, what this is going to feel like in terms of the cut in spending for the period from 2011 to 2014.’
The paper assumed that the recession might be worse than the government was predicting, and that cuts to public spending will therefore have to be more severe. This could result in overall spending cuts of up to 15% from 2011 to 2014.
Among the solutions it outlined was a ‘core and options’ approach, where only basic services were provided for free. More means testing and the withdrawal of some services were also considered.