With more cuts looming, IfG calls for fundamental Whitehall reform

A further £22bn in spending cuts or tax rises will be required in the period of the next spending review to 2017-18 if the government is to achieve its goal of eradicating the structural deficit, new analysis says.

By Joshua.Chambers

15 Nov 2012

The Social Market Foundation and Royal Society of Arts report ‘Fiscal Fallout’, published on Monday, uses the same financial prediction models as the Office of Budget Responsibility to analyse future challenges in public spending.

The report says a total of £48bn of cuts will be required. Evenly spread across departments over the three years from 2015-16 to 2017-18, this would represent an 11 per cent reduction in spending.

However, the report adds that if the health, education and international development budgets are allowed to grow with inflation – as in the current round – then other departments would have to find average savings of 23 per cent.

The report warns that “there is little coherence between our national strategies for fiscal sustainability, sustainable growth and public service reform”, and calls for a more joined-up approach to service delivery designed to break down traditional ways of operating and re-assess government’s relationship with citizens.

“This new approach must start with a frank discussion about the way we make policy, how we deliver it, and what we measure and value in public services,” the report says.

Meanwhile an Institute for Government (IfG) report published last week, ‘Transforming Whitehall’, argues that fundamental changes will be required across Whitehall if the civil service is to handle a new set of cuts without weakening services.

Speaking at the IfG, civil service head Sir Bob Kerslake agreed: “You have to look fundamentally at the model of how you operate as a department, as a service. You can’t do it simply by stripping back and hoping for the best,” he said.

“There has to be change in the numbers, changes in the skills, and changes in the way individual departments go about their business.”

For more on the IfG's report, please see here.

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