Christmas cheer is in very short supply at the moment. Unemployment is up, inflation is morphing into deflation and the pound is heading inexorably towards parity with the euro.
Pain is all around, but it is the private sector that is really feeling the heat.
Jobs in retailing, banking and construction are disappearing quicker than mince pies at the office Yuletide party.
It might not feel like it to those on the front line, but public services will have a small breathing space as ministers put their faith in the £20bn short-term fiscal stimulus. Capital projects have been brought forward, while health and education funding has remained relatively buoyant.
But, as Tony Travers and Colin Talbot point out, the public sector will be sharing everybody else’s pain sometime very soon. In 2011–14, spending growth will be cut to 1.1% in real terms, leaving a £37bn black hole.
During this period of uncertainty it is vital that the public services continue to improve their performance levels. Sadly, this week was not one to remember with much affection.
We saw a doubling in the number of children’s services deemed inadequate, a damning report on the Sats debacle, an embarrassing announcement that public sector pensions have been overpaid for 30 years and a critical report on the Department for Transport’s attempt to make efficiency savings.
In this climate of general austerity and belt-tightening, public services can expect to come under increased scrutiny. Such poor performance allows critics to call for more spending cuts, greater privatisation and further inroads into ‘gold-plated’ final-salary pensions.
The good news is that public servants will have a vital role to play in the uphill climb towards recovery. It is a challenge they are eminently capable of meeting.
We wish all our readers good luck in this difficult endeavour. And, of course, a Merry Christmas and a Happy New Year.
