By Richard Johnstone | 11 September 2013
London suffered the biggest cut in public spending per head of population in the first two years of the coalition government’s austerity programme, an analysis of Treasury figures has revealed.
Public spending in the capital fell by £237 a head in the two financial years 2010/11 and 2011/12, according to figures contained in The state of the state report published by Deloitte and Reform today.
Overall UK spending per head fell by £21 in the same period, with four regions in England also seeing cuts above the average. Public spending in the northeast fell by £83, while in the West Midlands it was down by £66. It fell by £61 in Yorkshire and Humber and £44 in the Northwest.
Spending per head in Scotland was actually up by £116 over the same period, according to the report. It was also up in Northern Ireland (£95 per head over the two-year period) and Wales (£28).
According to the report, public sector job cuts were worst in the East of England in 2011/12, where the workforce decreased by 7.2%, and in the East Midlands in 2012/13, which was down by 3.9% in the year. Public sector employment fell by 4.5% in 2011/12 across the whole of the UK, and was also down 1.9% in 2012/13.
The report stated the UK state is still ‘shrinking’ following the impact of the 2008 financial crisis and the subsequent cuts to spending. It warned that ‘government as we used to know it’ prior to the crisis was unaffordable, and a new ‘sustainable model for public services’ was needed. No area of state activity should be protected from reform.
However, the report said government had only been making good progress against three of ten ‘indicators for government’ devised by Deloitte and Reform.
On a traffic light system, good progress has been made on managing cash more efficiently in government, driving significant headcount reductions and saving cash through value for money.
However, the coalition was rated red on four reform areas, including saving cash through tackling fraud, and the commitment to transfer one million public sector workers to mutuals by 2015. Other aims, including the need to increase localism, have been rated amber in the report.
Reform director Andrew Haldenby and Deloitte’s public sector leader Mike Turley said ‘the time is tight for a national discussion on where the state begins and ends’.
They added: ‘Government in the UK has grown significantly over the past 50 years, and demand for public services is set to continue growing in the next 50 to come.
‘With pressure form the global financial crisis, the UK state as we know it has became unaffordable and is now reshaping its limits. The government – of whatever political mix – cannot simply “keep calm and carry on”.’
