Social assistance to the royal yacht: battle looms over UK spending priorities | Economic policy
Battles within government over spending priorities are looming, with the task made more difficult by the economic damage caused by Covid. Here are some of the major upcoming budget decisions for Boris Johnson and his Chancellor Rishi Sunak:
Social care for adults
In his first speech as Prime Minister, Johnson said he had a “clear plan” to reorganize social care for the elderly on a sustainable and equitable basis. Almost two years later and nothing has emerged. What was billed as a crucial meeting this week between Johnson, Sunak and Health Secretary Matt Hancock to set the groundwork for a plan for England has been postponed.
Social assistance for adults is not only extremely expensive – although many of the consequences of this situation are left to the councils providing the services – it is the political equivalent of a hand grenade, as has learned the hard way Theresa May when her proposals the sector was ravaged ahead of the 2017 general election.
But more inaction will not help. The coronavirus has highlighted the many weaknesses in care, from lack of benefits to uneven staff, and each winter without change will add to the pressure on the NHS.
The share price depends on what is on offer. Sir Andrew Dilnot, who produced a report on the sector in 2011, argued on Monday that an aging population meant governments would have to spend an additional £ 5 billion a year on social care anyway in the years to come. come. To fund the system, finding enough staff and providing some sort of social insurance to cap the costs of caring for individuals at a relatively low level would be around £ 3-5 billion more per year, he said. he declares.
NHS and nurses’ wages
Healthcare in England already accounts for a huge share of public spending – around 7% of GDP. The coronavirus has further increased cost pressures, both through direct spending from the pandemic and catching up on delayed treatments. British medical association estimated that working on this backlog alone could cost between £ 4 billion and £ 5.4 billion.
There is also the question of whether nurses should be offered more than the recommended 1% salary increase. A 5% increase would cost around £ 1.7bn per year.
It is a politically dangerous area for the government. Delaying a catch-up program for a missed treatment would risk accumulating even higher costs for poorer long-term health, as well as misery for millions of patients. When it comes to nurses’ pay, ministers appear determined to stick to 1% – but that will lead to significant resentment.
Catching up with schools
Another resource-abundant area that now, because of Covid, requires even more funding. It is needed to help students make up for learning lost for months outside of the classroom.
One of the most important spending decisions Johnson will face in the coming months is how much he invests in catch-up arrangements to close the widened – and disproportionate – ‘success gap’, mostly through additional small group tutoring.
This month the government pledged £ 1.4bn in additional spending, for a total of £ 3bn in catch-up commitments over the past 12 months. But the new money was less than a tenth of the £ 15billion recommended by Sir Kevan Collins, the No 10 Education Restoration Commissioner, who resigned in protest. More is likely to come, but how much remains to be decided.
Ministers have publicly pledged to triple lockdown state pensions – increasing them each year by what is the highest of inflation, average income growth or 2.5%. But one of Covid’s economic anomalies has been year over year increase in average income by nearly 5%, due to a drop in the proportion of the lowest-paid jobs, a figure set to increase further.
It is estimated that each 1% increase in state pensions, which are administered across the UK, costs the government an additional £ 800million per year. So a 5% increase could add £ 4bn to the total budget. It is extremely expensive, but giving up or changing the triple lock, even temporarily, would be politically risky.
the not everyone can have a prosperous future without tackling the climate crisis, according to Johnson. His 10 point plan involves £ 12bn in public investment, including £ 2.8bn to accelerate the deployment of zero emission cars, £ 1bn for fuel efficiency, £ 1bn for capture and l ‘burying carbon emissions and £ 385million for advanced nuclear power, designed to support up to 250,000 green jobs.
Johnson pledged in early 2020 to invest tens of billions of dollars in the rail network and £ 5 billion to boost buses, cycling and walking and reduce air pollution. There is a £ 640million Nature for Climate fund to support tree planting and peatland restoration and £ 5.2 billion over six years for flood and coastal defenses. Other countries, like the United States and Germany, are much more engaged in environmental policies.
This year the UK will host Cop26, the international climate summit, with the aim of getting countries to pledge $ 100 billion (£ 72 billion) in climate finance per year to help countries developing to cope with global warming. In 2019, the Prime Minister doubled the UK’s £ 5.8 billion commitment to £ 11.6 billion over five years, although overall foreign aid has since been cut.
Experts say No 10 and the Treasury have the opportunity to find common ground on how to build an economy that creates good jobs while improving the environment.
Courts and judicial system
Another area exacerbated by the impact of Covid is the backlog of court cases. Delays of several years in obtaining justice are not uncommon; there are over 55,000 Crown court cases awaiting hearing in England and Wales. Ministers are concerned that the scale of the problem could soon turn into a political crisis.
Putting a price on the binding is not easy but a Report of the Bar Council last year calculated that simply restoring per capita court spending to 2010 levels, before years of cuts, would cost an additional £ 2.48bn per year.
Infrastructure / upgrade
Since the “move upmarket” remains more of a nebulous concept than a coherent project, calculating a budget is more or less impossible. There is already £ 4.8 billion UK wide leveling fund and £ 3.6 billion city funds for England. But making a real difference in disadvantaged areas would cost significantly more.
Ministers also have to deal with additional Covid-related costs of existing infrastructure projects. For example, delays due to the pandemic would have added still £ 1.7 billion of the total price of the HS2 rail system.
A tiddler in terms of public spending – £ 200million, which will be honored by the Defense Ministry – but nonetheless a move that has the potential to backfire on the government, even with the idea rebranded as a ‘national flagship “trade-based. Apparently decided by Johnson after a long campaign by his former employer, the Telegraph, there appears to be little enthusiasm for the project among some ministers. Or even, apparently, among the royals themselves.