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Pressures and priorities Current

finance , public services , taxation , population and demographics

 

 

IPPR is embarking on a major new project investigating the implications of demographic change, technological improvements and behavioural change on the public finances over the long term. We will explore the strategic choices facing policymakers on tax and spend, and examine the need for reforms that raise productivity, reduce demand or create new sources of funding and finance.

In the current economic climate, the immediate concern for politicians and policymakers is reducing the structural deficit alongside restarting growth. However, a much bigger fiscal challenge looms ahead – one that has so far received very little policy attention, yet will have major implications for spending, taxation and public service reform.

Long-term fiscal projections produced by the Office for Budget Responsibility forecast rising public spending, largely as a result of population ageing, combined with relatively stable tax revenues. This will create a growing hole in the public finances over the next 50 years, one that will remain even if the Coalition is able to eliminate the structural deficit by 2016–17 as now planned. Politicians of all parties are yet to face up to this looming fiscal challenge, with public debates dominated by plans for short-term deficit reduction. Little robust analysis of the nature or extent of long-term fiscal constraint has been conducted.

Download a full project background and summary.

This work is generously supported by A4e.