Exclusive -- David Blanchflower: "This MPC is not fit for purpose"

"After the election we are going to have to reconsider who sets monetary policy"

In his economics column for the New Statesman this week, Professor David Blanchflower, a former member of the Bank of England's Monetary Policy Committee (MPC), says "the MPC's days are numbered, certainly in terms of its remit and probably its membership. After the election we are going to have to reconsider who sets monetary policy."

He adds: "The MPC missed the recession entirely . . . The recession was much deeper because of their failure to act. The MPC was asleep at the wheel. Its inability to communicate adequately what quantitative easing is supposed to do suggests it has learned little."

Blanchflower concludes: "This MPC is not fit for purpose and should be disbanded."

Professor Blanchflower also criticises his former colleague on the MPC Andrew Sentance, who has warned in recent days that rake hikes might be imminent: "The first rule, for an MPC member, should be to do no harm. He was the one who throughout 2008 denied there was going to be a recession."

And he dismisses the decision by the Conservative shadow chancellor, George Osborne, to cut public spending within 50 days of any election, saying: "He seems hell-bent on creating the Osborne Dip."

We've published the column online this evening (two days ahead of the magazine hitting the newstands), so go read it now.

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The big problem for the NHS? Local government cuts

Even a U-Turn on planned cuts to the service itself will still leave the NHS under heavy pressure. 

38Degrees has uncovered a series of grisly plans for the NHS over the coming years. Among the highlights: severe cuts to frontline services at the Midland Metropolitan Hospital, including but limited to the closure of its Accident and Emergency department. Elsewhere, one of three hospitals in Leicester, Leicestershire and Rutland are to be shuttered, while there will be cuts to acute services in Suffolk and North East Essex.

These cuts come despite an additional £8bn annual cash injection into the NHS, characterised as the bare minimum needed by Simon Stevens, the head of NHS England.

The cuts are outlined in draft sustainability and transformation plans (STP) that will be approved in October before kicking off a period of wider consultation.

The problem for the NHS is twofold: although its funding remains ringfenced, healthcare inflation means that in reality, the health service requires above-inflation increases to stand still. But the second, bigger problem aren’t cuts to the NHS but to the rest of government spending, particularly local government cuts.

That has seen more pressure on hospital beds as outpatients who require further non-emergency care have nowhere to go, increasing lifestyle problems as cash-strapped councils either close or increase prices at subsidised local authority gyms, build on green space to make the best out of Britain’s booming property market, and cut other corners to manage the growing backlog of devolved cuts.

All of which means even a bigger supply of cash for the NHS than the £8bn promised at the last election – even the bonanza pledged by Vote Leave in the referendum, in fact – will still find itself disappearing down the cracks left by cuts elsewhere. 

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.