So the axe has started to fall – or in the more delicate terms of David Laws, the scalpel has started to slice. Cutting £6.2bn now is more of a symbol of the coalition’s commitment to cuts than something that will have a profound impact on the macroeconomy for the worse or better.
But the detail of the announcement is of course being scrutinised for signs of the more significant cuts yet to come in the emergency budget in June, and the spending review in the autumn.
About a third of the £6bn is accounted for by the efficiency cuts that are easy to sell politically: things like cutting back on consultancy, travel and IT. These are the low-hanging fruit that all politicians like to target. But around £50bn of savings have already been found over the last few years through the Gershon reviews, leaving the question of how much more there is to be found. No one would rally against cutting public sector waste – but the (multi) billion dollar question that this new government hasn’t had time to grapple with yet is how do you get local government and frontline services to take out ‘wasteful’ spending that does not impact on outcomes, rather than the spending that is crucial to achieving public service outcomes? Do we even know which bits of spending it is?
The plans also set out cuts to specific areas of departmental spending and programmes. On balance, these cuts do not bode well for opportunity and social mobility. There are some positives – for example, some of the money saved through consolidating BIS will be used to fund an extra 50,000 apprenticeships each year.
But facing the axe are some important programmes. The Future Jobs Fund – a scheme to guarantee long-term unemployed 18-24 year olds access to a job for six months – will go. For young people looking for their first or second job at a time of recession this is a kick in the teeth – being unemployed early on has a long-term negative impact on your career trajectory, and there is evidence to suggest opening up access to valuable work experience through a jobs guarantee can help to protect against the long-term impact of recession on young people’s future job prospects.
Also being cut is the Every Child a Reader Programme. This is a programme of intensive support for children falling seriously behind in reading in primary school. The Labour government invested in making it available to schools in light of very positive evidence from the Institute of Education showing that it helps children at serious risk of failing to ever develop good literacy skills to get those skills. For those children who would have benefitted from this programme in the future, this could be a significant dent in their social mobility – unless funding is found from elsewhere by schools, for example the new pupil premium.
Local authorities are also facing cuts of £311 million in their area-based education grants. This is in many ways inevitable – the government can’t decree the specific details of every cut in Whitehall and so has to devolve the axe downwards. But the danger is that the savings might be found from reducing spending on services for children with special educational needs and those who have been excluded from school – two of the most vulnerable groups of children and young people in society. The new coalition government should be thinking about safeguards to ensure that the most disadvantaged groups don’t suffer from the devolved axed. Pledging to ringfence spending on these groups rather than the mainstream schools budget would send out a strong signal on this, as Demos has previously argued in its report Ex Curricula.
Deciding what to cut was always going to be hard. Although the parties disagree about exactly how much needs to be cut and when (the Conservatives favoured spending taking more of the brunt than tax increases in the run up to the election than the two other parties) they are all in agreement that significant savings need to be found over the next 3-4 years. The fact we have lost some valuable programmes in this £6bn is a sign of the bitter medicine yet to come.
Sonia Sodha is head of the capabilities programme at the think-tank Demos. This post first appeared on www.demos.co.uk
