IFS: "Departmental spending down, public sector employment down faster"

Link to the fully monty

"Current spending plans imply an average cut in public service spending of

one third

across unprotected Whitehall departments – i.e. all excluding health, schools and overseas aid – by 2017–18. If the defence equipment budget were to be added to the list of protected areas, then spending in unprotected areas would need to fall by

around 35%.

"Over this parliament, departments are planning to cut pay bills quicker than other forms of spending, and so far, they are doing it through

reducing employment

much more than through real pay cuts.

"This means that public sector jobs look likely to be cut faster than implied by Office for Budget Responsibility forecasts. If departments continue to cut their pay bills beyond 2014–15 at the rate they are currently planning, then public sector employment would

fall by 1.2 million

by 2017–18, rather than by 900,000 as the OBR forecasts.

"Avoiding such deep cuts to public services, whilst sticking to fiscal plans, would require

substantial and additional cuts

in social security spending; or

tax rises

would need to be implemented.

"Over the last 30 years, tax rises announced in the year after a general election have averaged £7.5 billion. Considering this trend, and in the context of the current fiscal situation, further tax rises following the next election would not be surprising."

(Formatting added!)

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The Guardian:
"UK deficit reduction will need big tax
rises after next election, experts warn"

"Britain's leading experts on public finances have warned
of hefty tax increases in the first budget after the 2015 election
as the next government seeks to repair a £64bn deficit
caused by a stuttering economy."