£43 billion a year needed at Autumn Budget just for public services to stand still, says TUC and NEF

New Research by @The_TUC and @NEF – £43 billion a year needed at Autumn Budget as a minimum to protect both public services and pay from CPI inflation

• NEW RESEARCH by the New Economics Foundation (NEF) and TUC sets out what is needed at the Autumn Statement as a minimum to protect both public services and pay from CPI inflation
• The economic crisis of 2022 means public services budgets are now worth far less due to higher prices
• TUC warns of stealth cuts if spending on public services isn’t adjusted for inflation
• In his 2021 budget, Sunak called world-class public services “the people’s priority” and promised to maintain their budgets

The TUC is today (Thursday) calling on the new Prime Minister to protect public services from the impacts of inflation and the economic crisis caused by the Conservatives’ mini-budget.

New research published today by the TUC and NEF reveals that an additional £43bn a year (2022/23 prices) will be needed by 2024/25 just to ensure real spending on public services stays at the level set out in the October 2021 spending review.

The research highlights the damage that will be done to public services and key workers’ livelihoods if Rishi Sunak does not keep his commitments in the 2021 spending review.

The TUC says that the Autumn Budget should set out a plan for rebuilding the economy, with the “people’s priority” of world-class public services at its heart.

Rishi Sunak’s commitment to public services

As Chancellor, Rishi Sunak’s set budgets to protect services like schools, hospitals, and the police from inflation in his 2021 Spending Review. And he promised the highest sustained investment in the public sector for almost half a century.

He told parliament that world-class public services are “the people’s priority”. And he presented public services as central to the stronger economy he wants to create:

“[An] economy of higher wages, higher skills, and rising productivity. Of strong public services, vibrant communities and safer streets. An economy fit for a new age of optimism.”

In his first speech as Prime Minister, Sunak promised “a stronger NHS, better schools, safer streets” and that he will “restore trust”.

The TUC says that the Autumn Statement will be his first major test of that promise and of his true commitment to public services.

Public services at risk

Conservative cuts since 2010 have left public services on the brink of collapse, with staff overwhelmed and many seeking to quit.

The economic chaos created by the Conservatives’ mini budget crashed the UK economy, increasing pressures on public services.

• Health and social care: Target wait times to see a GP and for hospital treatment are routinely missed. The number of patients waiting less than the target wait time of 62 days for cancer treatment has fallen dramatically from over 85% in 2012 to less than 66% in 2022. Since March 2022, average ambulance response times for category 2 emergencies such as heart attacks and strokes have remained at over double the 18-minute target time.
  Funding shortfall against 2021 Spending Review commitment – £15.7 billion a year (2022/23 prices) by 2024/25 to protect public services and prevent real terms cuts to public sector pay.
• Education: 90% of schools are warning that they will run out of money next year. And the average secondary school will have a budget shortfall of more than £200,000 which is equivalent to at least four teachers.
  Funding shortfall against 2021 Spending Review commitment – £7.1 billion a year (2022/23 prices) by 2024/25 to protect public services and prevent real terms cuts to public sector pay.
• Justice: The number of victims of crime waiting longer than year for Crown Court cases to be heard is up by 340% since 2020.     Funding shortfall against 2021 commitment – £900 million a year (2022/23 prices) by 2024/25 to protect public services and prevent real terms cuts to public sector pay.
• Environment, Food and Rural Affairs: The dumping of raw sewage into rivers and seas has more than doubled from 14.7 spill events per overflow in 2016 to 29.3 in 2021, whilst millions of pounds (£235 million) of funding to tackle the issue was cut. Funding shortfall against 2021 Spending Review commitment – £400 million a year (2022/23 prices) by 2024/25 to protect public services and prevent real terms cuts to public sector pay.

The Autumn Statement: political choices and “the people’s priority”

The TUC is calling on Rishi Sunak to stay true to the “people’s priority” with a commitment to fully protect public services against CPI inflation in the Autumn Statement.

Liz Truss admitted that the economic approach of Conservative governments since 2010 had failed. Her approach failed hard and fast too.

The TUC says that the Prime Minister must take a different approach. He should recognise that rebuilding public services is not only the “people’s priority”, but also an economic priority too, providing a foundation for growth.

The Autumn Statement should:

• Fully protect public services and their staff against CPI inflation: The Chancellor will need to provide an additional £43 billion a year (2022/23 prices) by 2024/25 to protect our public services. This will also help counter recession and speed up recovery.
• Outline a future investment plan to make UK public services world class: Protecting our public services from cuts is only the start. The Prime Minister must also set out how he proposes to rebuild public services so they are, in his words, “world-class”.

TUC General Secretary Frances O’Grady said:

“We all need functioning, high-quality public services – our NHS, schools, local government and all our public services.

“This has left our services short-staffed and overwhelmed. And now the double whammy of soaring inflation and the Tories’ catastrophic mini-budget has pushed them to the brink.

“We’ve all heard the stories of people waiting too long for ambulances – and sitting on waiting lists for operations for months. We can all see too many schools are crumbling – and local councils are struggling to run basic services.

“As chancellor, the new prime minister must keep his promise that he will fund ‘world-class public services’. Our NHS, schools and public services must not be collateral damage to the Tories crashing the economy in 2022.

“Great public services improve all our lives. They underpin a growing economy – and a more equal society.”

ENDS

Notes to editors:

METHODOLOGY: The amount needed for public services to stand still without real-terms pay cuts to public sector workers has been calculated by taking the real value of departmental spending set out in the Public Expenditure Statistical Analyses 2022 using the average CPI inflation expectations from the Treasury review of forecasters as of October 17th, taken from HMT’s Forecasts For The UK Economy. This is compared to the real value expected at the 2021 Spending Review based on Office for Budget Responsibility’s forecasts for CPI inflation in October 2021. All figures are presented in 2022/23 prices.

– Autumn budget and spending review 2021 – Sunak speech: The full speech made by Sunak, with his promise to deliver on the ‘people’s priority of world class public services’ is here: www.gov.uk/government/speeches/autumn-budget-and-spending-review-2021-speech

– Sunak’s first speech as PM: The full speech made by Sunak as he entered Downing Street, with his promise of “a stronger NHS, better schools, safer streets” and to “restore trust”, is here: www.gov.uk/government/speeches/prime-minister-rishi-sunaks-statement-25-october-2022   

– Sources for information on public services: The information used above on the problems that families and businesses are facing accessing the services that they need are from the following sources.

Health and social care:

• Cancer treatment target times missed – Source: https://commonslibrary.parliament.uk/research-briefings/cbp-7281/   Average ambulance response times – Source: https://www.nuffieldtrust.org.uk/chart/how-have-response-times-for-category-3-urgent-calls-changed-over-time-5

Education:

• School leaders warn of budget shortfall – Source: https://dmscdn.vuelio.co.uk/publicitem/89ae4eec-c350-4dec-8213-f8c92b490d91 and 90% of heads warn they will run out of money – Source: https://www.theguardian.com/education/2022/oct/22/exclusive-90-of-uk-schools-will-go-bust-next-year-heads-warn

Justice:

• Data on Crown Court waiting times – Source: https://www.nao.org.uk/wp-content/uploads/2021/10/Reducing-the-backlog-in-criminal-courts-Summary.pdf

DEFRA

• Labour Party analysis of National Audit Office and official data on DEFRA cuts and sewage discharge – Source: https://www.independent.co.uk/independentpremium/uk-news/sewage-discharge-liz-truss-tory-b2151984.html

– About the TUC: The Trades Union Congress (TUC) exists to make the working world a better place for everyone. We bring together the 5.5 million working people who make up our 48 member unions. We support unions to grow and thrive, and we stand up for everyone who works for a living.

About NEF: The New Economics Foundation is a charitable think tank. We are wholly independent of political parties and committed to being transparent about how we are funded.