Pressure on public spending budgets likely to last seven more years

Austerity is here to stay, through to the 2015 election and even possibly the one due in 2020, the Institute for Government has said.

“There is more to come, for a long time to come,” the institute declared in a joint press briefing held with the Institute for Fiscal Studies on the issues to be considered by the chancellor of the exchequer, George Osborne, in his 2015-16 spending review, expected on 26 June.

Health has been largely protected from the cuts in public spending introduced by the coalition government in 2010; but as a direct result spending in other government departments has been disproportionately affected, explained Carl Emmerson, deputy director of the Institute for Fiscal Studies.

He predicted that in addition to the 9.1% cut in spending promised by the government in 2010 (and already largely achieved), a further cut of 2.8% was likely to be announced by Osborne in his review of spending for 2015-16. In the following two years, 2016-18, which Osborne will not deal with, Emmerson estimated that a further 7.6% cut would be needed, …