Spending cuts come in at just a fraction of what is needed

In a recent announcement the new coalition government said that it would be prioritising on the reduction of the highest level of public debt on record, with spending cuts aimed at reducing the current deficit, which is over one hundred and fifty six billion.

A number of spending cuts were announced by the new coalition government earlier this week, and so far the government has announced cutbacks that equate to around six billion pounds. Furthermore, a date has now been set for the coalition government’s first emergency budget, where further measures for cutting the public debt will be announced.

Despite the six billion pounds worth of cutbacks that the government will save as a result of cutting services some industry officials have said that this saving will make up only a tiny percentage of what is needed in order to tackle these debt levels. This claim was made by the Institute for Fiscal Studies.

Some are concerned that the reduction of state spending coupled with leaving civil service jobs refilled could result in the loss of between fifty thousand and one million jobs this year alone. The civil service has now put into place a freeze on recruitment as part of the spending cutbacks.

With the Institute for Fiscal Studies suggesting that the six billion pounds worth of savings that will come from the cutbacks made so far will only cover around ten percent of what is actually needed, this means that the additional measures that are announced by the government will need to result in savings of tens of billions in order to effectively tackle the public debt mountain.

The new chancellor, George Osborne, recently said: ‘I would like to see an economy that is less dependent on debt, an economy where we save and invest for the future. It is a small state and a bigger society and that is because we have run out of money as a society.’