The Chancellor, we are constantly being told, has stuck solidly to “Plan A” – the spending reductions set out in SR2010. And today’s “Spending Round” was only about 2015-16. Really?
A quick look at the figures for 2014-15 set out in SR2010 (table 1) and the same figures for 2014-15 as set out in SR2013 show that there’s a difference: SR2013 is only a little matter of £10.6bn less in 2014-15 than originally set out in SR2010.
Below are the figures for some of the bigger departments and the total. As you can see, most of them have had the odd £1-2bn shaved off the original SR2010 plan.
Now there are many good reasons why this might have happened. Changes in external factors the Government can’t control. Changes in the allocation of functions between departments. Decisions to further decrease spending, or consolidate ‘under-spends’. Maybe the figures are on a different basis? All perfectly legitimate.
But why have we not been told? It’s not important? Well, we have just had a whole “Spending Round” over just £11.5bn – more or less the same amount as the difference between SR2010 and SR2013 for 2014-15.
And this means that the cumulative difference by 2015-16 is £22.1bn, not £11.5bn.
As usual, the Government just hopes no-one notices and asks no awkward questions. it’s no way to run a democracy.
7 thoughts on “SR2013 and SR2010: “Life is What Happens Whilst You’re Making Plans” (John Lennon)”
Please keep tracking these things. Govt will always try to get away with half truths unless they are challenged. BTW you should credit John Lennon with “life is what happens when you are busy making other plans” I know how you hate plagiarism.
You are quite right I should have credited John Lennon. Showing my age – I just assumed everyone would know who it was, it’s such a famous line.
Thanks for these posts on the spending round. Such differences do matter and should be explained.
I think that the main difference in DEL between SR2010 and SR2013 is an entry of minus £11.2 billion in SR2013 called “Localised business rates (4)” that does not appear in SR2010. Footnote (4) says “Includes the OBR forecast for localised business rates that local authorities can now retain following changes to the local government finance system”. (I’m puzzling over why it should be a negative number – is it because it reduces the grant that goes to LAs?).
Without that entry, the departmental totals are £327.4 billion in SR2013 and £328.9 billion in SR2010 (minus £1.3 billion difference).
Thanks Ruth, and I think you are right about Localised Business Rate. It would show up as a negative because its retained money. Interestingly, I believe in Denmark local government collects all taxes (no HMRC equivalent) and retains ‘their’ funding before handing over the rest to central government. Changes the power relationship quite a bit.
Actually, Ruth, now I’m further puzzled – because if Localised Business Rate were the answer why would most departments see reductions for 2014-15 between SR2010 and SR2013? And would DCLG’s DEL not reflect the retained Business Rates? Anyone got an answer?
Of the 24 departments listed in SR10 and SR13, 12 went down, 6 went up and 6 were unchanged, and the resulting net change in DEL was minus £0.6 billion (this is ignoring changes in ‘Reserve’, ‘Special Reserve’ and the Business Rates already discussed). So while these changes are hard to explain, they went in both directions and more-or-less cancelled out.
I don’t understand why the DCLG showed no compensating change due to the retained business rates.
CLG is interesting in another way – in his speech, George Osborne said:
“My Right Honourable Friend the Communities Secretary has set an example to all his colleagues in reducing the size of his department by 60 per cent and abolishing twelve Quangos. He’s a model of lean government.”
I can find (11 of the) 12 abolished quangos here https://www.gov.uk/government/publications/quango-reform-public-bodies-closed-so-far
But the 60% reduction ‘in the size of the department’ is another matter.
DCLG departmental staffing has fallen by 29% between 2010 and 2012 – a substantial decrease but not 60% -and DCLG (Communities) administration budgets have fallen by about the same amount (data from Civil Service Statistics and Public Expenditure Statistical Analyses).
What has fallen is Total DEL for the CLG Communities programme (though not the much greater CLG Local Government budget). The fall is mostly in capital DEL, which is what the department uses to build social housing. As the IFS put it in February 2013: ”The biggest loser from the Spending Review was the Department of Communities and Local Government (DCLG), which is forecast to see a two-thirds reduction in its Communities budget – in large part due to cuts to spending on social housing.” http://www.ifs.org.uk/budgets/gb2013/GB2013_Ch6.pdf
So to present this as a cut in the ‘size of the department’ is an interesting use of words.