The Government faces a huge spending challenge. While it has made clear that it is prepared to borrow more than planned should the economy deteriorate, Prime Minster Theresa May has also committed herself to continuing George Osborne’s cuts to day-to-day spending. As she has set herself against substantial tax rises, such cuts remain the only long-term way to balance Britain’s books. 

At the same time, none of the pressures on public services have gone away. The performance of key parts of the NHS, such as A&E, is still declining. The pressures on areas as diverse as social care or the prison service remain both obvious and severe. Meanwhile, polling shows that the public’s appetite for further austerity appears to be declining.

This briefing paper examines the options that the Government has for reducing spending while maintaining the quality of public services.