![Pinterest](https://pinterest.com/pin/create/button/?url=https://uknews.evprotec.com/britain-risks-returning-to-austerity-of-2010s-economists-warn/&media=https://uknews.evprotec.com/wp-content/uploads/2022/10/TELEMMGLPICT000314383172_trans_NvBQzQNjv4BqgsaO8O78rhmZrDxTlQBjdLdu0TL-Cg_AMOUqySXmFgU.jpeg&description=The UK risks returning to the austerity of the 2010s if the Government freezes public services spending, economists have warned. While a real-terms freeze would save around £20bn a year by 2026-27, the impact would be huge, the Resolution Foundation said. Rampant inflation has already reduced public spending power by £22bn in real terms and turned planned spending increases into cuts for some departments. For example, real-terms education spending has gone from an increase of £1.5bn in 2024-25 from this year to a cut of £1bn, while the scale of future defence spending cuts has more than doubled from around £800m to £1.9bn. A freeze would mean the per-person spending of departments such as transport, justice and local government - assuming health, education, overseas aid and defence are protected - would be cut by around 9pc, the think tank said. It comes as Rishi Sunak and Chancellor Jeremy Hunt attempt to fill a deep hole in the public finances caused by rising interest rates and rocketing inflation. The Treasury's autumn economic statement, due on November 17, will be its chance to show they will tackle the UK's growing debt load. Sources claim the Treasury is looking for tax increases and spending cuts totaling as much as £50bn. Cuts to day-to-day public service spending – which in total amount to £437bn this year – are under consideration. James Smith, Resolution Foundation research director, said: "Significant reductions in day-to-day public service spending are on the cards, while protecting areas such as health and defence. This would repeat a key option chosen by Conservative-led governments since 2010. "Freezing such spending in real terms would save £20bn a year but mean a further 9pc budget cut to public services such as transport, policing and housing, and take Britain into a new era of austerity. "Given the political ramifications of such a move, the new PM and Chancellor may choose instead for tax rises to fill in far more of the current fiscal hole th){kind=link}
Freezing spending in real terms would save £20bn a year but mean a further 9pc budget cut to public services
The UK risks returning to the austerity of the 2010s if the Government freezes public services spending, economists have warned.
While a real-terms freeze would save around £20bn a year by 2026-27, the impact would be huge, the Resolution Foundation said.
Rampant inflation has already reduced public spending power by £22bn in real terms and turned planned spending increases into cuts for some departments.
For example, real-terms education spending has gone from an increase of £1.5bn in 2024-25 from this year to a cut of £1bn, while the scale of future defence spending cuts has more than doubled from around £800m to £1.9bn.