Speaking on the BBC’s Andrew Marr Show yesterday ahead of Wednesday’s statement, the chancellor acknowledged that public services were under pressure to deliver within the spending levels set by government, “in particular…social care and local authorities delivering social care are under some pressure”.
However, he insisted that the issue “was not just about money”.
“There are many authorities managing extremely well, there are many examples around the country of extremely good working between the NHS and social care authorities. Just 24 local authorities account for 50% of all the delayed discharges from the NHS, so it is about good practice as well as about budgets.”
Although he added there was a “very good case” to take a “longer term view” about the funding of social care services as society ages, this was separate to addressing the “short-term disparities” between areas that currently exist. “We have to look at what the differences are there.”
Hammond also indicated that he would take action to ensure the country had “reserves in the tank” to prepare for the economic impact of Brexit. Economic forecasters have stated that the Office for Budget Responsibility is likely to cut its borrowing forecast by £3bn to £65bn for the current year.
However, Hammond said he would use any headroom to ensure that he had flexibility in the years ahead.
“It is not money in the wallet because we are borrowing a huge amount of money. Remember we have over £1.7trn of debt, we’re spending over £50bn a year just on paying the interest on our debt, that is more than we spend on defence and overseas aid put together.
“So this is not money in a pot. What is being speculated on is whether we might not have borrowed quite as much as we were forecast to borrow and we’ll see the actual numbers on Wednesday. But if your bank increases your credit card limit, I don’t think you feel obliged to go out and spend every last penny of it immediately.
“I regard my job as chancellor as making sure that our economy is resilient, that we have got reserves in the tank so that when we embark on the journey that we will be taking over the next few years we are confident that we have got enough gas in the tank to see us through that journey. That’s seems the sensible way to approach it for me.”
