In terms of changes since his July budget, the basic story of the Autumn Statement is that George Osborne has used more favourable tax forecasts from the OBR to ease up a little on planned spending cuts. The stress here is on ‘a little’. This is why my piece for The Independent focuses on the big picture. (There are a number of minor points that I think are interesting, and I’ll comment on those in a later post.) We still have sharp fiscal tightening, with the OBR’s estimate of the cyclically adjusted budget deficit showing a turnaround worth 4% of GDP between 2015/16 and 2019/20. (That is nearly as much as the contraction from 2009/10 until 2015/16. The turnaround in the actual deficit is slightly larger.) While the US and Euro area ease off on fiscal consolidation, George wants to carry on.
For regular readers there are two new points that I make in The Independent article. The first is about the myth of ‘protected departments’. It is classic spin: employ words which the media will use endlessly that do not mean what most people think they mean. The second is that if the goal is to reduce the size of the state, this seems a remarkably incompetent way of doing it. Rather than look at what the state does and strategically decide what we could do without, the method seems to be to keep cutting until a crisis becomes visible. I do not think enough is made of this government’s incompetence. I want to illustrate both points by looking at health.
Let’s start with this nice chart from John Appleby of the King’s Fund. It should be shown every time anyone claims that NHS spending under this government has been protected.
For reasons that are well known, the share of spending on health pretty well everywhere has been rising steadily since WWII. Try to reverse that and you get a crisis. Try to reverse that when you are also slashing local authority spending for community help, so that elderly patients cannot be discharged into local authority care, and you get a major crisis.
But that is not the only sign of incompetence. Under the coalition Cameron undertook a massive reorganisation of the NHS, which was badly conceived and used up precious resources. (Perhaps the biggest political failure of the Liberal Democrats in coalition was to allow this reorganisation to go through: see this Institute for Government report aptly titled ‘Never Again?’) Then before the last election the Conservatives thought it would be a clever strategy to establish a ‘7-day a week’ health service. To try and justify that policy, health minister Jeremy Hunt made dodgy use of data to argue that health outcomes were worse if you were admitted to hospital at the weekend. Did no one tell him that this might lead some to do themselves harm by trying to delay going into hospital?
There is no money to fund this new policy, so Hunt has tried to restructure junior doctors contracts to pay for it. With many junior doctors already leaving the UK to work overseas, this was the last straw and they have voted overwhelmingly to go on strike. (Watch this video if you think picking this fight is clever politics.) In 2012 training places for nurses were cut, so now hospitals have to use more expensive agency nurses. All this indicates basic incompetence by those who ultimately are responsible for the NHS.
It was this kind of thing that I had in mind when I wrote: “It is difficult to know which is worse: duplicity to achieve an ideological goal or pursuing that goal incompetently.”