Public spending pressures Robert Chote Carl Emmerson Christine Frayne -1 -2 Financial year 10–11 09–10 08–09 07–08 06–07 05–06 04–05 03–04 02–03 01–02 00–01 99–00 8 Level (RH axis) 6 46 5 44 4 42 3 40 2 38 1 36 0 34 32 30 Percentage of national income 7 98–99 97–98 96–97 Percentage real increase Total Managed Expenditure (TME) 50 48 Total Managed Expenditure (TME) 7 48 Level (RH axis) 6 46 PBR projection (% of GDP, RHS) 5 44 Financial year 10–11 09–10 08–09 -2 07–08 -1 06–07 34 05–06 0 04–05 36 03–04 1 02–03 38 01–02 2 00–01 40 99–00 3 98–99 42 97–98 4 96–97 Percentage real increase 50 Real increase (LH axis) 32 30 Percentage of national income 8 Composition of total managed expenditure 2004-05 Health 17% 41% Education 13% 28% 1% Official Development Assistance Social security and tax credits Other What increases might we have? Total Managed Expenditure Of which: Health Education Official Development Assistance Social security & tax credits 'Other' -1 0 1 2 3 4 5 6 7 Percentage real increase 8 9 10 11 CSR 2007 PBR (2007-08 to 2010-11) TME (real increase) TME – (health + education + ODA) TME – (health + education + ODA + SS and TC) 1.8 0.8 –0.1 11 Labour years (1996-97 to 2007-08) Labour under Tory plans (1996-97 to 1998-99) SR to date (1998-99 to 2005-06) Current plans (2005-06 to 2007-08) Source: HM Treasury CSR 2007 TME (real increase) TME – (health + education + ODA) TME – (health + education + ODA + SS and TC) PBR (2007-08 to 2010-11) 1.8 0.8 –0.1 11 Labour years (1996-97 to 2007-08) 3.2 2.3 2.4 Labour under Tory plans (1996-97 to 1998-99) SR to date (1998-99 to 2005-06) Current plans (2005-06 to 2007-08) Source: HM Treasury CSR 2007 TME (real increase) TME – (health + education + ODA) TME – (health + education + ODA + SS and TC) PBR (2007-08 to 2010-11) 1.8 0.8 –0.1 11 Labour years (1996-97 to 2007-08) 3.2 2.3 2.4 Labour under Tory plans (1996-97 to 1998-99) –0.2 –0.7 –0.2 SR to date (1998-99 to 2005-06) 4.3 3.3 3.1 Current plans (2005-06 to 2007-08) 3.0 1.9 2.6 Source: HM Treasury Possible CSR 2007 allocations TME as PBR TME 1.8 TME minus health, education, ODA 0.8 TME minus health, education, ODA, social security and tax credits –0.1 (1) TME (2) ‘Other’ constant spending as % GDP constant as % GDP (3) TME constant in real terms Source: HM Treasury Possible CSR 2007 allocations TME as PBR (1) TME (2) ‘Other’ constant spending as % GDP constant as % GDP TME 1.8 2.4 TME minus health, education, ODA 0.8 1.7 TME minus health, education, ODA, social security and tax credits –0.1 1.3 (3) TME constant in real terms Source: HM Treasury Possible CSR 2007 allocations TME as PBR (1) TME (2) ‘Other’ constant spending as % GDP constant as % GDP TME 1.8 2.4 2.8 TME minus health, education, ODA 0.8 1.7 2.4 TME minus health, education, ODA, social security and tax credits –0.1 1.3 2.4 (3) TME constant in real terms Source: HM Treasury Possible CSR 2007 allocations TME as PBR (1) TME (2) ‘Other’ constant spending as % GDP constant as % GDP (3) TME constant in real terms TME 1.8 2.4 2.8 0.0 TME minus health, education, ODA 0.8 1.7 2.4 –2.0 TME minus health, education, ODA, social security and tax credits –0.1 1.3 2.4 –4.9 Source: HM Treasury Annual cost of different illustrative alternative scenarios TME as PBR TME (1) TME (2) ‘Other’ constant spending as % GDP constant as % GDP (3) TME constant in real terms 1.8 Spending cut/increase –£8½ bn over 2007 CSR (2005–06 terms) Additional funding required (2005–06 terms) No change Source: HM Treasury Annual cost of different illustrative alternative scenarios TME as PBR TME 1.8 Spending cut/increase –£8½ bn over 2007 CSR (2005–06 terms) Additional funding required (2005–06 terms) No change (1) TME (2) ‘Other’ constant spending as % GDP constant as % GDP (3) TME constant in real terms 2.4 No change +£8½ bn Source: HM Treasury Annual cost of different illustrative alternative scenarios TME as PBR TME 1.8 Spending cut/increase –£8½ bn over 2007 CSR (2005–06 terms) Additional funding required (2005–06 terms) No change (1) TME (2) ‘Other’ constant spending as % GDP constant as % GDP 2.4 2.8 No change + £6½ bn +£8½ bn +£15 bn (3) TME constant in real terms Source: HM Treasury Annual cost of different illustrative alternative scenarios TME as PBR TME 1.8 Spending cut/increase –£8½ bn over 2007 CSR (2005–06 terms) Additional funding required (2005–06 terms) No change (1) TME (2) ‘Other’ constant spending as % GDP constant as % GDP (3) TME constant in real terms 2.4 2.8 0.0 No change + £6½ bn –£35½bn +£8½ bn +£15 bn –£27 bn Source: HM Treasury Public spending pressures Robert Chote Carl Emmerson Christine Frayne