Friday, June 26, 2009
Plaid Cymru advisor warns of impact of Labour cuts
The Western Mail site has just gone into time travel mode again and won't display any items later than last week, but I thought it was important to highlight the latest musings by Plaid Cymru guru Dr. Euryl ap Gwilym, even though they are pretty depressing.
The good doctor says that according to Treasury forecasts the amount of money the Assembly will have to spend will increase nominally in the current year and in 2010-11. That of course amounts to a real term cut. In subsequent years it gets worse.
Dr. ap Gwilym says that there is sufficient information in the Budget Red Book to come to an informed estimate based on two key statements by the Chancellor. These are that (1) UK current expenditure will grow at 0.7% per year in real terms from 2011-12 onwards and that (2) public sector net investment will move to 1.25% of GDP by 2013-14. As the current level of investment is 2.2% this means a 17.2% real cut in the amount available to the Assembly to spend.
His conclusion is that between 2011-12 and 2013-14 there could be a total loss of £2.2 billion from Wales' budget.
Now that could be a problem. It would of course mean some very difficult decisions. It will almost certainly have a major impact on key services including education and health that could not be mitigated by 'efficiency savings'.
Above all it means that the next Assembly election will be fought on manifestos seeking to manage these cuts and lessening their impact rather than previous efforts that have sought to spend increases to produce distinctive benefits (sometimes called gimmicks) for the people of Wales.
We will not know the actual situation until after the next public sector spending review which will be post the General Election but whatever happens this evidence is testimony to the impact of the current recession and the future problems it is storing up for us. Above all we cannot let Labour assume the moral high ground because they face the same issues as everybody else.
It is not just Tory cuts that we need to worry about but the impact if Labour's policies as well.
The good doctor says that according to Treasury forecasts the amount of money the Assembly will have to spend will increase nominally in the current year and in 2010-11. That of course amounts to a real term cut. In subsequent years it gets worse.
Dr. ap Gwilym says that there is sufficient information in the Budget Red Book to come to an informed estimate based on two key statements by the Chancellor. These are that (1) UK current expenditure will grow at 0.7% per year in real terms from 2011-12 onwards and that (2) public sector net investment will move to 1.25% of GDP by 2013-14. As the current level of investment is 2.2% this means a 17.2% real cut in the amount available to the Assembly to spend.
His conclusion is that between 2011-12 and 2013-14 there could be a total loss of £2.2 billion from Wales' budget.
Now that could be a problem. It would of course mean some very difficult decisions. It will almost certainly have a major impact on key services including education and health that could not be mitigated by 'efficiency savings'.
Above all it means that the next Assembly election will be fought on manifestos seeking to manage these cuts and lessening their impact rather than previous efforts that have sought to spend increases to produce distinctive benefits (sometimes called gimmicks) for the people of Wales.
We will not know the actual situation until after the next public sector spending review which will be post the General Election but whatever happens this evidence is testimony to the impact of the current recession and the future problems it is storing up for us. Above all we cannot let Labour assume the moral high ground because they face the same issues as everybody else.
It is not just Tory cuts that we need to worry about but the impact if Labour's policies as well.
