In an altogether extraordinary pre-budget report, one of the most extraordinary moments was not even cheered or gasped at at the time. It was when the Chancellor announced the rate of real terms spending growth from 2011 on. Read it at paragraph 6.33 here:
6.33 The Government is determined to support the economy in the short term and continue to improve and invest in public services in the years ahead. To secure the improvements and investment within a framework that delivers sustainable public finances over the medium term, the 2008 Pre-Budget Report therefore also sets assumptions for spending growth in the period from 2011-12 onwards:
- total spending will continue to grow by 1.1 per cent a year in real terms over the years 2011-12 to 2013-14 ;
- current spending will grow by 1.3 per cent in 2011- 12, 1.2 per cent in 2012-13 and 1.1 per cent in 2013-2014; and
- public sector net investment will remain at historically high levels moving to 1.8 per cent of GDP by 2013-14.
So, after the epic slurges in public spending in recent years, the government is now proposing to have spending rise only 1.1% per year in real terms from 2011-2014. That, if delivered, would be an extraordinary turnaround - tighter that ConservativeHome called for, tighter than many commentators argued was even possible.
