Rolling blog of think tank reaction to the Spending Review
The TaxPayers' Alliance
"The Chancellor has announced some welcome savings which will ease the pressure on taxpayers now and in the future, including some sensible changes to the welfare system and an attempt to end the absurdity of pensioners on the Costa del Sol getting the Winter Fuel Payment. Tens of billions of pounds are still being wasted by bloated bureaucracies each year, so there is plenty of room for further cuts. Unfortunately Mr Osborne is still boasting about squandering enormous amounts on foreign aid and vanity projects in the energy sector, while other developed economies are showing more restraint.
"The best news was on public sector pay. At the moment public sector staff get more generous pay than their counterparts in the private sector and gold-plated pensions. Mr Osborne has taken an important step towards delivering a fairer deal, although he is still planning to increase the pay of bureaucrats already receiving more than the private sector workers who pick up the bill.”
Institute of Directors
“The Spending Review leaves business feeling like Oliver Twist. More please, Chancellor. Please could you go further and faster with spending restraint? Please could you shift even more expenditure from current spending towards infrastructure? Please could you widen the welfare cap to include pensions? But please could you also do less ring-fencing of spending in departments such as the NHS.”
“The Chancellor made many welcome announcements in the Spending Review, including the 1% limit to public sector pay growth and the intention to curtail automatic pay progression - regardless of performance - within the public sector. This, combined with previous policies aimed at decentralising public sector pay, is creating a quiet revolution in public services. Taken together with the commitment to accelerate the free schools programme, the Spending Review had a radical supply-side dash.”
Confederation of British Industry
John Cridland, CBI Director-General, said:
"The Chancellor has carefully walked a tightrope of protecting growth, while making sizeable savings to pay down the debt. Infrastructure is rightly singled out as the most effective engine for growth, as we urged. While the Government talks a good game on infrastructure we’ve seen too little delivery on the ground so far. It is critical we see a real pipeline of projects announced tomorrow, so investors know what schemes are going ahead, where and when."
“Other pro-growth areas including science, innovation, skills and exports have also been shielded from cuts. The £185 million boost for the Technology Strategy Board - a crucial anchor for innovation - is particularly welcome. With stretched government finances it is tough but necessary to target automatic progression pay in the public sector. It is encouraging to see that Government will have greater control of the welfare budget through the new cap."
“The next big challenge to address is the issue of ring-fencing to ensure that efficiency flows across all parts of the public sector.”