Cycle of crisis, cash and repeat in public services costs government £10bn

The Government is spending over £10bn in five years just to keep troubled services – such as hospitals and prisons – going, according to a new report. Yet this extra money is not sorting out any of the underlying problems these services face.

Performance Tracker, published today by the Institute for Government and the Chartered Institute of Public Finance and Accountancy (CIPFA), looks at one hundred data sets across nine key public services and finds government is being forced into poor and reactionary spending decisions, instead of getting ahead of problems before they become crises.

Key findings from the report include:

  • Hospitals and prisons are spending more, with no sign of improvement in key pressure points.
  • Schools and adult social care have had emergency cash injections, but there is no clear plan for what happens when this extra money runs out.
  • GP numbers are not rising despite the Government’s plans to improve the service.
  • UK Visas and Immigration managed the initial post-referendum surge in demand, but a much greater task lies ahead.
  • Government does not have enough data to manage the risks around vital neighbourhood services, like bin collection and road maintenance.

The Chancellor has little scope for manoeuvre in the upcoming budget. The choices open to him are getting narrower by the day, with weak economic forecasts and the challenge of budgeting for Brexit. Meanwhile, the debate over police numbers and the public sector pay rumbles on.

The report concludes that in services such as prisons and hospitals, the Chancellor has no choice but to spend more. When it comes to schools and adult social care, the Government as a whole must make tough and increasingly urgent policy decisions.

Finally, Performance Tracker calls for the creation of a new watchdog (similar to the Office of Budget Responsibility) to scrutinise the assumptions underpinning government decisions about public spending.

Dr Emily Andrews, report author, said:

“Failure to deal with building pressure is creating an imperative to act in prisons, hospitals, schools and adult social care. This is a poor state of affairs. No government should end up in such a situation, unless beset by a natural disaster or similar unpredictable emergency. If the Chancellor and government cannot break out of this reactive cycle they must accept that budgets will rise or services will deteriorate.”

Rob Whiteman, Chief Executive of CIPFA, said:

“Government must go beyond moving from one reactive cash injection to the next, because this fails to assess the sustainability of many public services. It may now be more effective to stop some services than see them collapse. The choices facing the Chancellor are limited, but Government must do better at medium to long term financial planning using one set of robust numbers that underpin policy assumptions and budget allocations. This requires an honest assessment of current performance and what is affordable, with higher spending in some areas.”

ENDS

Notes to editors

  1. The full paper is attached and can be found here (from 00.01).
  2. The Performance Tracker series brings together data from across the public sector to provide a comprehensive picture of the performance of the Government in running key public services. The second edition includes data on GPs, local neighbourhood services, criminal courts and UK Visas and Immigration – in addition to hospitals, adult social care, prisons, police and schools.
  3. The Institute for Government is an independent think tank that works to make government more effective.
  4. The Chartered Institute of Public Finance and Accountancy (CIPFA) is one of the leading professional accountancy bodies in the UK and the only one which specialises in the public services. It is responsible for the education and training of professional accountants and for their regulation through the setting and monitoring of professional standards
  5. Figure of £10 billion based on extra resources being diverted to keeping services going over the period 2015/16 - 2019/20 in hospitals, prisons, adult social care and schools.
  6. For more information, please contact nicole@instituteforgovernment.org.uk / 07850313791.
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