Revealed: how Osborne misled MPs over the deficit

The Chancellor said that borrowing was forecast to fall this year but the small print of the Office for Budget Responsibility document suggests otherwise.

Against expectations, George Osborne announced in his Budget speech that the deficit was forecast to fall "this year and next". He insisted that this was the case even if special factors (such as the transfer of the Royal Mail pension fund) are excluded. 

But scour the small print of the Office for Budget Responsibility document and it emerges that the Chancellor misled the House. As Table 4.36 shows, "excluding Royal Mail, APF and SLS transfers" (the final column), borrowing is forecast to rise from £121bn in 2011-12 to £123.2bn in 2012-13. As in last year's Autumn Statement, when he banked the 4G receipts early, Osborne has once again relied on smoke and mirrors to disguise his fiscal failings. 

This isn't mere pedantry; consistent deficit reduction is crucial to Osborne's narrative that "we're on the right track". But as the figures below show, that is far from the case. 

George Osborne poses for pictures outside 11 Downing Street in London before the Budget. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty
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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.