More than half of government cuts still to come

Wed, 05/02/2014 - 13:22 -- nick

More than half of the government's austerity cuts are still ahead, according to a shock new report.

The Institute for Fiscal Studies (IFS), a respected thinktank, says that 60% of planned cuts in public funding are still to come, putting ontold strain on public services.

This follows a decision by Chancellor George Osborne to extend austerity to 2019, which includes the announcement of £12 billion cuts to benefits in addition to the billions detailed before.

The IFS expects growth of 2.6% this year, higher than previously thought, but population growth and more need for the NHS's services - which are protected from cuts - means reductions in other budgets are likely.

Population is projected to increase by 3.5 million by 2018, raising demand for all public services at a time when the government is cutting the funding it will make available to fund them.

The Chancellor may go back to the social security budget again, both officially through further cuts and unofficially through encouraging more benefit sanctions, removing money from some of Britain's poorest citizens, often for spurious or invented reasons.

The increase in the personal tax allowance to £10,000 may be adding to the problem; according to the IFS, it costs over £10 billion each year in lost revenue, but doesn't help those on very low pay.

Unemployed people often join the workforce at the bottom, including in part-time roles, and do not earn enough to benefit from this raised threshold.

There are further challenges for parents who are trying to get into work.

The report makes clear that "current support - delivered through a combination of direct provision, subsidy for privare provision, means tested benefits and tax breaks - is not well designed."

It adds "recently announced reforms will further complicate things", suggesting many of those with children are likely to struggle to get into work in the future.

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