The Spending Review has to be seen in context

Look back to 2010.

There is a risk that the Chancellor’s Spending Review is seen in isolation, but to appreciate the potential effects of some of the latest austerity measures announced by George Osborne, you have to look back to 2010.

There is a ticking time bomb of public sector cuts that have yet to be implemented from when they were announced early in the Coalition’s life. The full impact of the austerity measures have yet to be felt by households in Britain. However, the cuts of £11.5billion announced in the latest Spending Review for 2015-16, in addition to those from 2010, will be felt with full force when they are eventually implemented. The protection of critical front-line services can no longer be guaranteed. No one knows yet what the impact the cuts will be and yet Chancellor’s scythe keeps slicing away.

There were few surprises when it came to Departmental Expenditure Limits (DEL). Though there were some sweeteners in there, such as the welcomed emphasis on capital spending to stimulate growth, in reality that increase in capital spending looks good only on paper. When taken along with the wide-spread cuts to departments and local government, the extra money is nothing more than shuffling the deckchairs around.

There will come a point where the Government can’t cut the DEL budget anymore and public services will suffer. Front-line services are already at breaking point. ACCA’s current research Developing strategic financial leadership highlights that directors of finance in local government feel confident that they have delivered all that was asked to date, but are less confident about the future and the next 10 years. There is a general lack of a long term strategy for public services.

Where there were positives in the Chancellor’s review was in the pooling of health and social care budgets for the elderly. This has been a long time coming and will allow greater flexibility and efficiency of service provision.

The Chancellor also took a step in the right direction with the annually managed expenditure (AME) budget, which totals £350 billion, over half of public expenditure. AME has for too long not been actively managed and controlled. The emphasis has been on ‘hands off’ management for too many years. So the cap is good move but with the caveat that limits and caps are notoriously broken. So perhaps with that in mind, the Chancellor took the safety measure of a wider role and powers for the Office of Budget Responsibility, in particular its trigger of an early warning signal and monitor expenditure. 

However, the Chancellor didn’t go far enough and missed further opportunities to take a more structural look at AME and review the drivers behind the budget headings and how they interrelate. The lack of a long term strategic review is evident. The cap is a short-term fix. There needs to be a longer term perspective that goes beyond the short term political cycle.

Other countries, such as the US and Australia, have long term fiscal strategies that encompass 50 years or more. Here in the UK, we seem wedded to the immediate future. There was no consideration as to whether the AME budgets should be devolved, exploration of the impact new policy initiatives would have on AME, or any focus on what the impact that further joint working by government departments might have.

There needs to be more emphasis on whole life costing – cradle to the grave, across all public spending, not just AME. Perhaps then we will get a clearer understanding of the true cost of what public expenditure should be, rather than have a demand-led welfare system.

It seemed unusual and illogical to makes cuts in the Treasury where financial leadership is needed most. Managing public expenditure needs more, not less expertise. While setting an example might seem like the right gesture, government needs stronger financial leadership at a time of on-going cuts and greater financial management.

All in all, the Chancellor made some positive movements to getting public expenditure under control, but the potential impact of back logged cuts from 2010 on top of some of these announcements today, as well as his reluctance to take a radical approach to tackling annual managed expenditure, outweigh those positives.

George Osborne. Photograph: Getty Images

ACCA Head of Public Sector

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Let's seize our chance of a progressive alliance in Richmond - or we'll all be losers

Labour MPs have been brave to talk about standing aside. 

Earlier this week something quite remarkable happened. Three Labour MPs, from across the party’s political spectrum, came together to urge their party to consider not fielding a candidate in the Richmond Park by-election. In the face of a powerful central party machine, it was extremely brave of them to do what was, until very recently, almost unthinkable: suggest that people vote for a party that wasn’t their own.
Just after the piece from Lisa Nandy, Clive Lewis and Jonathan Reynolds was published, I headed down to the Richmond Park constituency to meet local Green members. It felt like a big moment – an opportunity to be part of something truly ground-breaking – and we had a healthy discussion about the options on the table. Rightly, the decision about whether to stand in elections is always down to local parties, and ultimately the sense from the local members present was that it would be difficult  not to field a candidate unless Labour did the same. Sadly, even as we spoke, the Labour party hierarchy was busily pouring cold water on the idea of working together to beat the Conservatives. The old politics dies hard - and it will not die unless and until all parties are prepared to balance local priorities with the bigger picture.
A pact of any kind would not simply be about some parties standing down or aside. It would be about us all, collectively, standing together and stepping forward in a united bid to be better than what is currently on offer. And it would be a chance to show that building trust now, not just banking it for the future, can cement a better deal for local residents. There could be reciprocal commitments for local elections, for example, creating further opportunities for progressive voices to come to the fore.
While we’ve been debating the merits of this progressive pact in public, the Conservatives and Ukip have, quietly, formed an alliance of their own around Zac Goldsmith. In this regressive alliance, the right is rallying around a candidate who voted to pull Britain out of Europe against the wishes of his constituency, a man who shocked many by running a divisive and nasty campaign to be mayor of London. There’s a sad irony in the fact it’s the voices of division that are proving so effective at advancing their shared goals, while proponents of co-operation cannot get off the starting line.
Leadership is as much about listening as anything else. What I heard on Wednesday was a local party that is passionate about talking to people and sharing what the Greens have to offer. They are proud members of our party for a reason – because they know we stand for something unique, and they have high hopes of winning local elections in the area.  No doubt the leaders of the other progressive parties are hearing the same.
Forming a progressive alliance would be the start of something big. At the core of any such agreement must be a commitment to electoral reform - and breaking open politics for good. No longer could parties choose to listen only to a handful of swing voters in key constituencies, to the exclusion of everyone else. Not many people enjoy talking about the voting system – for most, it’s boring – but as people increasingly clamour for more power in their hands, this could really have been a moment to seize.
Time is running out to select a genuine "unity" candidate through an open primary process. I admit that the most likely alternative - uniting behind a Liberal Democrat candidate in Richmond Park - doesn’t sit easily with me, especially after their role in the vindictive Coalition government.  But politics is about making difficult choices at the right moment, and this is one I wanted to actively explore, because the situation we’re in is just so dire. There is a difference between the Conservatives and the Lib Dems. Failing to realise that plays into the hands of Theresa May more than anyone else.
And, to be frank, I'm deeply worried. Just look at one very specific, very local issue and you’ll perhaps understand where I'm coming from. It’s the state of the NHS in Brighton and Hove – it’s a system that’s been so cut up by marketisation and so woefully underfunded that it’s at breaking point. Our hospital is in special measures, six GP surgeries have shut down and private firms have been operating ambulances without a license. Just imagine what that health service will look like in ten years, with a Conservative party still in charge after beating a divided left at another general election.
And then there is Brexit. We’re hurtling down a very dangerous road – which could see us out of the EU, with closed borders and an economy in tatters. It’s my belief that a vote for a non-Brexiteer in Richmond Park would be a hammer blow to Conservatives at a time when they’re trying to remould the country in their own image after a narrow win for the Leave side in the referendum.
The Green party will fight a passionate and organised campaign in Richmond Park – I was blown away by the commitment of members, and I know they’ll be hitting the ground running this weekend. On the ballot on 1 December there will only be one party saying no to new runways, rejecting nuclear weapons and nuclear power and proposing a radical overhaul of our politics and democracy. I’ll go to the constituency to campaign because we are a fundamentally unique party – saying things that others refuse to say – but I won’t pretend that I don’t wish we could have done things differently.

I believe that moments like this don’t come along very often – but they require the will of all parties involved to realise their potential. Ultimately, until other leaders of progressive parties face the electoral facts, we are all losers, no matter who wins in Richmond Park.


Caroline Lucas is the MP for Brighton Pavilion.