Adam Schoenborn summarises the recent Disraeli Room debates on public sector cuts
The Comprehensive Spending Review is finally here and, with it, a 19% cut to departmental budgets over the next four years. Over the months since the election, the Disraeli Room blog has had a wide-ranging debate on where, when, how and how deeply to cut. It is worth taking a moment to summarise some of that debate in light of the following announcements:
A 25% cut in resource spending for Business, Innovation and Skills
Of particular note is a cut in spending on University funding
from £7.2bn to £4.2bn in line with the recommendations of the Browne review
, which called for students to pay a larger share of the cost of their education.
ResPublica Fellow Prof Alan Riley has argued
that these reforms will return British Universities to the top of world rankings,
The Browne Report provides a route to global academic predominance. By advocating uncapped fees while providing a series of funding mechanisms to limit the effects of fees on poorer students he provides the groundwork for growth in the higher education sector. Once the Universities have significantly expanded their size the Browne funding mechanisms will be redundant as the Universities will have the resources to fund any British resident student who requires support.
A 24% cut in resource spending for Culture, Media and Sport
Arts Council England (ACE) will face an overall cut of 30%, and the government is asking it to pass on cuts of only 15% to "front line" arts organisations.
I have posited that artists are right to argue that “this risks destroying this remarkable and fertile landscape of culture and creativity, and the social and economic benefits it brings to all” but wrong to protest tax rises for those who have made millions from the creative industries. Ultimately, successful artists should lead a drive for renewed civic responsibility, especially as philanthropy will need to play a greater role in arts funding for the foreseeable future.
£1 billion for a Green Investment Bank
While Jonathan West worried that the Treasury lacked the political will to invest in the promised Green Investment Bank, and Simon Beard worried that they lacked the resources, both felt there was room for more civic engagement in the green economy – including by running the Green Investment Bank as a mutual.
International aid budgets have been ring-fenced
Although there remains concern that funds are being diverted away from need and towards areas prioritised for national security. Earlier this year, Samuel Middleton addressed the thorny issue of diverting aid to national security projects, asking the pressing question: What is international aid for?
£7 billion in welfare cuts, in addition to the £11 billion announced in June
Welfare funding and reform has been a hot topic on the Disraeli Room blog. At a macro level, Imran Hussain, Head of Policy, Rights and Advocacy at the Child Poverty Action Group, set out a fairness test for budget cuts to welfare.
The fairness of cuts has been a particular concern for our Children and Families Unit, not least because the IFS has forecast that the cuts will hurt families with children the most.
Dr. Sandra Gruescu, Head of the Children and Families Unit, has argued that child benefit should be means-tested on the basis of joint family income; that raising the statutory retirement age with life expectancy will hurt the most deprived and that savings vehicles should be safeguarded with new incentives, such as privately-sponsored match-funding and discounted access to public amenities.
Watch this space over the next week, as ResPublica's Unit heads analyse how the CSR will affect their respective areas of research. Our chief economist Greg Fisher has kicked off the debate with an argument for moving the debate beyond Keynes vs. Hayek.