Austerity isn’t over, IFS Budget analysis shows

Labour has said that analysis of the Budget by the Institute for Fiscal Studies (IFS) shows that austerity is not over, and that the government’s spending plans were “over-hyped and underwhelming”.

The research released by the think tank in the wake of the parliamentary statement on Wednesday notes that spending per person for public services will remain “well below 2010-11 levels”.

The organisation examined the coronavirus measures outlined, concluding that it “does much less” for those having to reduce production, especially in the manufacturing sector, and those not entitled to statutory sick pay.

The analysis also observed that “the decisions made in this Budget don’t provide great confidence that the government is willing to grasp the nettle” on achieving its net-zero emissions target.

Commenting on the IFS’s assessment, John McDonnell said: “The Budget is already unravelling, with it becoming increasingly clear that the current and capital spending commitments are over-hyped and underwhelming when subject to proper scrutiny.

“The IFS has confirmed that this Budget means austerity is not at an end, lacks a plan to achieve net-zero emissions across government, and puts forward a coronavirus package that is regrettably full of holes.

“This is a publicity-seeking Budget without a plan or a strategy underpinning it, and it is likely to leave people expecting much from this government feeling sorely disappointed.”

The research stated that, outside of health, spending per capita will be 14% lower than in 2010 and around 19% lower when you account for money pledged to replace existing funding coming from the EU.

The Budget made little mention of resources to undo ten years of cuts to local councils. There was no mention of social care or social services, or local community services such as libraries and youth centres.

No new sources of local revenue were announced for local government, and there was no indication of any movement on rate capping or of a council tax revaluation.

Local councils across the country have seen their funding from central government cut by up to as much as 80% in some areas over the past decade.

Treasury analysis shows that the poorest tenth of UK households will be worse-off as a result of the Budget, while the eighth and ninth deciles of the income distribution benefit the most.

More from LabourList