Public service costs 'have been shifted onto citizens'

By agency reporter
October 14, 2018

Government is quietly shifting costs of public services on to individuals, according to a new report from the Institute for Government and the Chartered Institute of Public Finance and Accountancy. Where government can get people to pay directly for services – from garden waste to legal aid – it is increasingly doing so.

Published on 10 October 2018, Performance Tracker 2018 warns that important choices and trade-offs between spending and performance have not been made explicit to the public. Locally, social care is crowding out other spending, such as environmental services. Nationally, health is crowding out the rest.

A ‘concern rating’ included in the report sets out the cost and performance of nine public services. It highlights serious concerns about prisons, adult social care and neighbourhood services. Schools have faced the smallest overall financial squeeze since 2010. But schools’ budgets have started to be squeezed more tightly over the past couple of years and could be where the Government looks for future cuts.

The report says that public sector efficiency has risen since 2010, helped by the public sector pay cap. But productivity has gone up mainly by doing ‘more of the same’ rather than through reform. Loosening the pay cap may not solve problems of staff recruitment and retention.

The Government needs to address openly big questions about the future of public services. The easiest savings have been made and choices are getting harder. This report shows that governments cannot continue for long to provide the same services by simply muddling through, with dollops of emergency cash. Tough decisions will have to be made: whether tax increases, lower expectations of services, more individual contributions or radical service changes.

Dr Emily Andrews, Associate Director at the Institute for Government, said: “Public services are more efficient than they were eight years ago. But those savings haven’t been enough to bridge the widening gap between spending and demand for many services. One way the government has tried to save money and avoid the need for tax increases is by asking members of the public to contribute more in other ways – from volunteers running libraries to people paying a greater share of the cost of defending themselves in court.”

Gemma Tetlow, Chief Economist at the Institute for Government, said: “The Prime Minister and Chancellor must start making explicit the realities facing the country about what public services cost and how that money can be raised. They need to begin telling people clearly that they face a national choice.”

Rob Whiteman, Chief Executive of CIPFA, commented: “This report hammers home just how significant the spending pressures are on public services. Organisations have had no choice but to shift the costs on to individuals to be able to continue to provide vital services, such as adult social care. This will become increasingly common.

Indeed, data from OBR shows that if current taxation levels (37 per cent of GDP) stayed the same, in fifty years the state will only be able to fund retirement pensions and health services. And so, if the Government wants to deliver the kind of services that communities expect and need, then they must be willing to fashion a new sustainable funding model. To achieve this, bolder, braver and perhaps politically-unpopular decisions will have to be made.”

* Read Performance Tracker 2018  here

* Institute for Government


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