Pressures and priorities: The long-term outlook for Britain's public finances
Published date: 20 Sep 2012
Download full publication Purchase via print on demand
This report sets out the major drivers of rising demand for public spending in key areas and highlights the political choices available to UK citizens and policymakers in determining the impact of these trends on our public finances over the next 50 years.
Current political debates are dominated by an argument about the impact of austerity on the UK’s prospects for economic growth, but these debates rarely stretch to an informed examination of the possible drivers of tax revenues and public spending over the long term, and the political choices implied by these trends. Yet this kind of debate is vital given continued population ageing, technological change and the rising demand for public services generated by growing national prosperity over the long run.
Our analysis is based upon projections by the Office for Budget Responsibility (OBR) of the long-term state of the public finances, which assume that current policy does not change over the next 50 years and that economic growth is steady. The report considers the implications of the OBR's projections for key areas of public spending, sources of uncertainty in those projections, and the possible consequences of variation in long-term demographic change, economic performance and political decision-making.
Projections of long-term fiscal sustainability tell us what will drive rising demand for public spending and what will drive falling revenues. Politicians will choose whether and how to respond to these trends, and have a range of options available to them. The report identifies four key approaches, with implications for policymaking in every area, at every level:
- Raise the long-term rate of growth and the employment rate to help achieve fiscal consolidation and, over the long term, reduce the size of the ‘fiscal gap’.
- Increase tax revenues to make up the shortfall in future income and consider if total revenues should be higher in the long term to pay for some of the extra demand for services and benefits.
- Identify priorities for public spending and the trade-offs inherent in different choices.
- Reform public spending to limit rising demand or reduce the cost of public provision, to address cost pressures in public services.
In the news
Chancer of the Exchequer
The Sun - 22 Mar 2013
Military and local councils set for deeper cuts after 2015
The Telegraph - 22 Mar 2013
Five things to expect from the Autumn Statement
New Statesman - 04 Dec 2012
Labour: Fire top brass to save frontline troops
Daily Mirror - 24 Oct 2012
David Miliband on housing & childcare
The Guardian - 18 Oct 2012
Leader: things can only get worse
Times Higher Education - 27 Sep 2012
Chart of the day: fiscal sustainability
New Statesman - 26 Sep 2012
Getting the UK on to a 'glide path'
BBC News - 24 Sep 2012
Graeme Cooke on the welfare state (21mins45)
BBC Radio 4 World at One - 21 Sep 2012
Osborne's stark choices on where to cut
Financial Times - 21 Sep 2012
Nick Clegg fails to save his skin
Guardian - 21 Sep 2012
Think-tank warns of £14bn cuts
Financial Times (£) - 20 Sep 2012
Treasury must find £14bn more cuts
Guardian - 20 Sep 2012
Whitehall budgets 'need to be slashed more'
The Times (£) - 20 Sep 2012
Axe maniac: Osborne's cuts
Daily Mirror - 20 Sep 2012
NHS faces £8bn cuts after next election
Independent - 20 Sep 2012
Benefits claimants could see income drop
Daily Mail - 19 Sep 2012
Author(s) : Kayte Lawton - 27 Sep 2012
Author(s) : Amna Silim - 21 Sep 2012
Author(s) : Kayte Lawton - 20 Sep 2012
You may be interested in...
IPPR in the news
Who benefits from welfare?
Prospect £ - 23 May 2013UK higher education: let's not follow the leader but develop our own vision
The Guardian - 22 May 2013Mervyn King's housing warning is too little, too late
The Guardian - 21 May 2013Nigel Farage and Alex Salmond trade insults in battle of nationalists
The Guardian - 20 May 2013
Local solutions are the key to full employment
New Statesman, Staggers blog - 20 May 2013Exam fail kids are facing jobs woe
The Sun - 15 May 2013Will Ed Miliband be the Doctor Who of politics?
The Telegraph - 14 May 2013Labour will not be able to meet child poverty targets, says thinktank chief
The Guardian - 13 May 2013
Slave-to-work dads ‘being squeezed out of family life,' says MP Jon Cruddas
Manchester Evening News - 13 May 2013Laptop U: Has the future of college moved online?
The New Yorker - 13 May 2013Ed Cox on 'two-speed Britain'
Observer - 12 May 2013Francis Maude to consider fixed terms for top mandarins
Financial Times (£) - 12 May 2013
Childcare reforms in chaos
Daily Mirror - 10 May 2013Sarah Mulley on the Queen's speech (2 mins 55s)
Channel 4 News - 09 May 2013Queen's Speech 2013: Economist Attacks Immigration Curbs
Huffington Post - 09 May 2013Follow Macmillan and build, build, build
New Statesman - 08 May 2013
School inspections deeply toxic, thinktank says
The Guardian - 08 May 2013School League Tables Damaging To Students' Vocational Education, Warns IPPR
Huffington Post - 08 May 2013A common sense policy to create jobs and combat what ails Britain
The Independent - 07 May 2013250,000 children could suffer due to league table changes
The Telegraph - 07 May 2013