After nearly a decade of austerity, GDP per person has been hit by £1,500 – just over £3,600 per household, according to research by the New Economics Foundation think-tank.
The analysis, published today, said that austerity has reduced GDP growth every year since 2010, and has suppressed the level of GDP by nearly £100bn in 2018-19.
NEF said: “Reduced government spending has also served to exacerbate existing economic imbalances by forcing households to increase their own borrowing to sustain GDP growth.”
Alfie Stirling, head of economics at NEF, said: “For nine years, the elephant in the room has largely been missed: the sheer scale of economic damage that these targets have contributed to in the first place.
“The human impacts have always been clearly visible for all to see – from rising homelessness to longer A&E waiting times. But now we can also get closer than ever before to measuring the impact on the economy as a whole – and using calculations that have even been rubber stamped by the government themselves.
“The big picture here is that the livelihoods of people and communities have been made more bleak as a direct consequence of active government decisions. This should not be allowed to happen again.”
This week the Local Government Association also warned that some low-income families face “financial exclusion” if spending cuts are not reversed in the Spending Review.
The LGA noted that councils have lost 60p out of every £1 from government to spend on services since 2010, forcing councils to cut back on financial support to low-income families.
Specifically, the LGA pointed to central government funding for local welfare schemes, which stopped in 2015. This funding was used for “short-term crisis support”.
Richard Watts, chair of the LGA’s resources board, said: “In spite of financial challenges, many councils are still finding ways to provide direct and indirect financial support to those in financial difficulty or at risk of financial exclusion.”
“Councils need the resources and capacity to disentangle and address complex issues, focus on prevention and bring services together.
“Unless local support is effective there is a risk that we entrench poverty and its associated problems.”
Analysis from the Resolution Foundation this week found that child poverty has reached record levels due to stagnating incomes and benefit cuts.
