One of the government’s messages from the budget is that age of austerity is over.
And it is clear from the details of individual Whitehall budgets that all departments are on course to have more money in real terms at the end of the parliament than they started with.
Rishi Sunak achieves this ambition by reversing cuts that were put in place last year. It means he can rebut critics who have likened him to the architect of austerity – George Osborne.
He told MPs his tax rises would re-energise public services, much as Gordon Brown would have done in the era before the financial crash when the former Labour chancellor repeated the phrase “prudence for a purpose” on a loop.
However, there are plenty of ministers who will be asked to tackle post-pandemic problems with funds that are worth only a fraction of their value in 2010.
Justice secretary Dominic Raab secured a 12% increase in funding over the next five years, but still has one hand tied behind his back after the Resolution Foundation showed he must tackle a backlog of court cases with 15% less cash in 2026 than in 2010 once inflation is taken into account.
Transport secretary Grant Shapps must operate with 32% less funding in 2026 compared with 2010, despite uplift over the next five years of more than 20%, while work and pensions secretary Thérèse Coffey must tell her civil servants that their 15% real-terms increase by 2026 will still leave them with a 40% cut since 2010.
The health service is the big winner. The Resolution Foundation said the continuing prioritisation of health and social care spending will mean that, by 2024-25, the department will have received a “staggering” £84bn of the £111bn a year increase in Whitehall-controlled day-to-day departmental spending since 2009-10.
“As a result, it will account for 46% of such spending, up from 34% in 2009-10,” it added.
Because Sunak wants to bring down borrowing over the next four years, extra spending is largely paid for by £40bn of higher taxes.
To many, this constraint punishes education more than any other department.
Paul Johnson, the director of the Institute for Fiscal Studies, said: “Over the whole period since 2010, by contrast, health spending will have increased by over 40%, education spending by less than 3%.”
“For the chancellor to have felt it appropriate to draw attention to the fact that per pupil spending in schools will have returned to 2010 levels by 2024 is perhaps a statement of a remarkable lack of priority afforded to the education system since 2010.
“A decade and a half with no growth in spending despite, albeit insipid, economic growth is unprecedented. Spending per student in [further education] and sixth form colleges will remain well below 2010 levels. This is not a set of priorities which looks consistent with a long-term growth strategy. Or indeed levelling up,” he added.
Sunak has signalled that this situation is unlikely to change. If he finds any extra funds, they will be dished out in the form of tax cuts.
