The UK government has decided to cut a further £3bn from this year’s UK departmental budgets. The Scottish Government said the consequential cut to the 2015/16 Scottish budget was £176.8m, although the Treasury has reduced that number today to £107m. Scotland has already suffered an overall revenue budget cut of 9% and the capital budget has been cut by 25% since 2010.
The next stage of cuts will probably be confirmed in the emergency summer budget on 8 July. On current plans the UK government will slash a further £30bn, with big cuts in fiscal years 2016 and 2017, to stabilise in 2018 and rebound in 2019. The Barnett consequentials of this will depend on where they cut in England.
The IFS published a pre-budget analysis of the spending challenges this will create for the UK government last week. They point to underlying pressures that are increasing spending in other areas including debt interest, NI contributions and pensions. You also have to add Conservative manifesto spending commitments on the NHS, extension of free childcare, the new tax-free childcare scheme, the removal of the cap on higher education student numbers and the Dilnot social care funding reforms.
The remaining cuts will not be evenly spread. Spending on overseas aid and the NHS in England is set to continue increasing in real terms, while schools’ spending in England per pupil is to be protected in cash terms. All this requires cuts elsewhere averaging 15.3%. Although protected spending in these areas does at least help the Barnett consequentials.
This summary shows that the Chancellor's cuts are unnecessary and he is even prepared to stifle the modest economic recovery in pursuit of his narrow ideology.