Osborne’s Spending Review: An £11.5bn Slap in the Face for Public Sector Workers, Pensioners and the Poor

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UK Chancellor George Osborne today set out his ‘austerity’ manifesto for the next general election.  He laid out £11.5bn of planned spending cuts to take place in the first year of the next parliament in 2015/6, which primarily make public sector workers, pensioners and the poor even poorer.  He has also confirmed that his ideological austerity model will continue past this parliament, as critical analysts and writers have been warning for years.

Where Will the Axe Fall?

I will not rehash Osborne’s entire Spending Review, you can find that here.  Instead I want to focus on some key cuts.  It is also useful not to think of them as cuts, but transfers.  Each cut from the infrastructure, the services and the social security systems of our state have simply been transferred to fund the privatisation and commercialisation of our state.

Total Spending

Osborne announced pubic spending of £745bn in 2015/6.  This is actually £1bn more than he has previously announced.  It means the overall spending as a % of GDP is actually be several higher than Labour’s last year prior to the Bank Bailout.  The government is not cutting spending, it is radically changing what we spend our taxes on.  This is the key to understanding the ideological nature of bogus austerity.  It is not tightening the belt, it is taking food from the mouths of the poorest, to stockpile it for the richest.

Education

The Tories have signalled their commitment to the privatisation of our education system with this spending review.

What he said:

Budget rise to £53bn

School budgets in England to be protected

New national funding formula for schools to ensure fairer allocation of funding

The reality:

The Education Budget of 2008/9 was actually £63.1bn.  This means that in 2015/6 there will be an absolute cut from education of £10bn a year, each year.  This means we’ll be about £60bn, or more than a years’ worth of education funding, by the time this further cut takes effect.

Despite claiming to protect the Education budget, spending figures from last year demonstrate the Government are doing quite the opposite.  Last year, the budget for education was cut by 5.7% in real terms.  Whilst infrastructure spending was cut 81%, and the Non-Academy Schools Budget was cut 4.31%, the budget for Academy Schools was increased by a whopping 191%. The state sector is being starved of funds, while the Academy sector enjoys a glut of funding which it spends inefficiently and opaquely.

It was recently revealed that there will be a shortfall of 250,000 school places by 2014, whilst the tax payer has picked up a £70m bill for PFI schools which had to close. Osborne’s response to this? To hoots and hollers from the Education Secretary and large portions of the Coalition benches, Osborne announced the building of a record 180 new Free Schools in 2015/6.  More of the same policy which fails our children, and benefits big banks and private education interests.

Welfare

Osborne’s language and posturing on welfare during the Spending Review Speech epitomised the poor bashing indulged in by this government throughout this parliament.  It included measures which indulged the darker angels of our nature, penalising single parents, immigrants and the unemployed.

What he said:

A cap on welfare spending from 2015 – to be set in cash terms every four years, including Housing Benefit, tax credits and disability living allowance.

Pensioners living abroad will lose eligibility for Winter Fuel Allowance if their new country is warmer than England in winter.

Benefit claimants will have to wait 7 days before being able to receive social security

Claimants will have to attend Language Schools or have benefits cut

Claimants will have to sign on to the governments Universal Jobmatch database in order to receive their benefits.

The Reality:

In my write up of this year’s Budget, I warned that the ‘Annually Managed Expenditure’ cap (the welfare cap) announcement was the item to watch.  This effectively ends the core principle of the welfare state. The entire point of a welfare system is that is exists to serve the needs of those who depend upon it.  To set an arbitrary cap is socially illiterate.  The fact that support will be withdrawn from those who need it, does not remove the need.  What will happen to those who cannot pay their rent, feed their children or afford the care they require once the cap has been installed? Answer came there none.

The language issue is pure bigot baiting implying a language issue which simply does not exist. 

Public Sector Jobs and Conditions

Those in public sector jobs have already spent the last five years paying for the Financial Crisis they did nothing to bring about.  Today, Osborne announced the bad times will keep rolling for the public sector – those are our nurses, our teachers, and our street cleaners.

What he said:

144,000 public sector job cuts

Automatic progression pay to be ended in civil service, schools, hospitals, prisons and the police

The reality:

Full time male public sector workers have seen their wages cut 2.1% in real terms each year of the Coalition government. The extension of this below inflation cap on wages means further real terms wage cuts to those working in some of the most socially valuable vocations.  Despite this the pay gap between public and private sector wages has actually widened, due to an even more dramatic fall in private sector wages.  The answer to this should be to take action on the exploitative downward pressure on wages, not to create some bogus equality of suffering among workers, while executives and business owners see their profits soar at their expense.

Pensions have also taken a significant hit, with public sector staff asked to pay more into their pensions, while reforms will cut the value of their pensions by a third.

The government is keen to say that for each public sector job lost, private sector jobs are created.  All this means is they are transferring jobs from a democratic, accountable public sector to an undemocratic, unaccountable, private sector. The net result will see us left with reduced wages, job security, terms and conditions as workers, and more costly, less accountable services as citizens.

It’s a Matter of Priorities

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This is a first snapshot of the Spending Review – as the detail is released over coming days we will see the fuller impacts on Health, Defence, Agriculture and others.  No doubt the further 10% cut on Local Government’s will also have real, painful consequences for communities across the country.

Despite all these cuts, the Tories plan to increase funding for the intelligence services by 3.4%.  Given the news this week of the overwhelming intrusion into our lives by the surveillance state – it is salt in the wounds that funding from Legal Aid (which we would rely on to challenge the illegal actions by intelligence services) is being cut, while funding to those services is being increased.

This so called Spending Review is a stake in the ground for the Conservative party, which Labour have done absolutely nothing to oppose.  Worse, the Labour party have announced they support the welfare cap, and the spending plans of the current government.  This is not a single party issue, it is an issue of a democratic deficit.  We have a political leadership across the piece which are fully signed up to ideological austerity and the privatisation of public services.  We have learned today that if we want this to stop – we will have to stop it ourselves.

4 thoughts on “Osborne’s Spending Review: An £11.5bn Slap in the Face for Public Sector Workers, Pensioners and the Poor

  1. they not getting back in so whot he is sprouting about is after hed hope to be back in but sacking people in jobs will affect us more less tax for one but then privitise it all so all his mates gets this moneys hes going to save nah robbing from one to give to their mates jeff3

  2. What did he specifically say regarding Jobmatch? People have to sign on to it now. Is he trying to force people to waive their rights under the DPA?

    I read that 144,000 public sector jobs re to go in/by the same period; that’s one job for every pound Mark Hoban made profiting from the sale of his second home.

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