Government budgetary plans always amount to a trade-off between what is desirable, possible and practical, but rarely if ever before can so much political capital have been riding on Chancellor George Osborne’s dramatic Comprehensive Spending Review.
Mr Osborne concluded his statement to the House of Commons by declaring that the stringent measures he had announced would restore sanity to public finances.
We must all hope that he is correct, for it is obvious that no Government can afford to continue running a £109 billion structural deficit, repaying interest at the eye-watering rate of £120 million a day, without destroying the UK economy for decades ahead.
Labour’s cuts would, arguably, have been even deeper because the party intended to wait for the economy to recover properly from recession before wielding the axe. It remains to be seen whether, as shadow Chancellor Alan Johnson has claimed, Mr Osborne’s savage inroads into central and local government budgets are too much too soon, or whether they do indeed turn out to be the economic saviour this country so desperately needs.
As ever on occasions like this, the devil will be all too apparent in the detail which is likely to come out over the next few days.
It is clear that the spending review has presented the coalition Government with an unprecedented opportunity to transform public service delivery, and you don’t have to be Nostrodamus to predict that many town hall functions will pass to the voluntary and private sectors as councils shed thousands of jobs and seek to cut budgets by almost 30 per cent by 2015.
One real problem will concern the ability of the non-public sector operators to step up to the mark and run public services efficiently and effectively. Research in Birmingham indicates that considerable effort will be required to grow the capacity of these organisations, particularly the voluntary sector upon which the Prime Minister’s Big Society appears to depend so heavily.
Birmingham will look with interest at the Chancellor’s confirmation of Accelerated Development Zones. The city council has been at the forefront of lobbying for the right to raise revenue against income streams from new businesses and estimates that at least £600 million for economic development can be raised in this way. Similarly, confirmation that the Government intends to look kindly on the city centre Midland Metro tram extension will provide a huge boost for the construction industry.
We look forward, too, to the result of Mr Osborne’s veiled threat against the police and fire services – that they can have lower budget cuts, if they co-operate with “substantial operational reform”. This is not the first Chancellor who has promised to end the ludicrous overtime payments and other benefits enjoyed by these organisations, whether he will succeed where others have failed remains to be seen.
Of course, all of the Chancellor’s promises of the promised land will be meaningless if Britain slides back into recession as a direct result of Mr Osborne’s cuts. This, as the Government must know, is the greatest gamble of all.
