Chancellor’s choices

The IPPR has laid out some options to “make the spending review are progressive as possible while still delivering a surplus”. The government is committed to reaching “a target for a surplus on public sector net borrowing by the end of 2019-20 and a target for public sector debt as a percentage of GDP to be falling each year". Like UNISON, the IPPR do not agree that the current pace of public spending cuts is the right response to current economic, fiscal or demographic challenges Britain faces. The report attempts to move beyond only saying that austerity is wrong and lays out a progressive (or perhaps less regressive) route to meeting those targets.
Key Principles
Support employment and productivity: spending of services that support employment outcomes particularly of parents and young people
Prioritise preventative spending: there is still to much focus on having ambulances at the bottom of a cliff and not enough of building a strong fence at the edge to stop people falling in the first place.
Integrate services: ensuring that health and social care are better integrated does offer the opportunity for substantial savings but this will only work if it is user centred and that needs local flexibility and control. Top down integration will not work.
Devolve powers and budgets
Policy proposals
• Childcare: On top of the increase to 30 free hours of childcare for 38 weeks an additional 15 hours of holiday childcare for 10 weeks of the year targeted at 2-4 year olds whose families are in the poorest 40%
• Youth guarantee: the government should guarantee a 6 month long job to all under 25s the at minimum wage for those claiming JSA for longer than 9 month
• Troubled lives programme: a programme to join-up services for people who face multiple challenges building on th troubled families programme through a £100million fund to give bonuses to local authorities who achieve targets set for supporting excluded adults
• Invest in social house building: triple the budget of Homes and Communities Agency to to be used to build 50,000 social rented homes per year
• Transport investment: finance the One North package of integrated road and rail capacity
• Invest in energy efficiency: a further £31billion for energy efficiency measures in low income households.

Priorities for protected spending: 16-19 education, Local government social care and science

Under the current plans there will be an average cut of 39.8% in unprotected non-devolved government departments. Given the implications of cuts at this level the report proposes instead raising more money by:
• Reducing the planned surplus to £7billion from £10billion
• Aligning the higher rate of capital gains tax with the new planned higher rate of dividend tax: generating £500million
• Increasing tax on insurance premiums: increase to 13% (well below VAT) generating £1.5billion
• Pension’s reform: a cash cap on tax free pension lump sums and reducing the earnings threshold beyond which the pensions contribution annual allowance is tapered away: generating £3billion

While UNISON and others continue to campaign against the need for austerity we also need to find ways to mitigate the impact of the cuts on public services and the people who use them. This report offers an interesting starting point.