SMF Briefing: Spending Review 2013

This briefing looks at the scale of cuts being made to current spending at the June 2013 Spending Review in the context of the entire fiscal consolidation, and shows that despite the difficulties of making the £11.5bn of cuts required, this Spending Review represents only a fraction of the remaining £33bn consolidation needed to get the public finances back on track by 2018.

The briefing also considers the implications of maintaining the ringfence on health spending in both the short-term and longer-term. We show that, while protecting NHS spending inevitably means a tighter settlement for other departments, abandoning it is unrealistic.

Indeed, we argue that a further three years without a real-terms increase in health spending is likely to put unsustainable pressure on the NHS, requiring it to meet what we call the ‘Post-Nicholson Challenge’ of finding £34bn of efficiency savings over seven years.

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