United Kingdom government austerity programme

The first period was one of the most extensive deficit reduction programmes seen in any advanced economy since the Second World War, with emphasis placed on shrinking the state, rather than consolidating fiscally as was more common elsewhere in Europe.

[17] In 2009, the term "age of austerity", which had previously been used to describe the years immediately following the Second World War, was popularised by Conservative Party leader David Cameron and future British chancellor George Osborne.

[19][20][21] Conservative Party leaders also promoted the idea of budget cuts bringing about the Big Society, a political ideology involving reduced government, with grass-roots organisations, charities and private companies delivering public services more efficiently.

[17] By 2016, the Chancellor was aiming to deliver a budget surplus by 2020, but following the result of the 2016 United Kingdom European Union membership referendum, he expressed the opinion that this goal was no longer feasible.

However, according to the Resolution Foundation and the Institute for Fiscal Studies (IFS), the OBR's forecasts for borrowing and debt were based on the assumption that the government continued with the planned spending reductions that were announced after the 2015 general election.

[40] Hammond's preference was to reduce the national debt with more years of austerity,[41] but in the October 2018 budget he agreed to defer the target date for eliminating the deficit, abandoning plans to achieve a surplus in 2022–23 to allow an increase in health spending and tax cuts.

[46] Government spending jumped from 39.1% of GDP to 51.9%, widening the deficit to a level not seen even during the 2008 financial crisis, and reversing austerity era efforts to balance national finances.

[47] The government abandoned efforts to lower the national debt across the lifetime of the 2019 parliament, as had been planned, instead adopting policies, described by Will Hutton in The Guardian as Keynesian, during the pandemic.

His plans drew warning from Olivier de Schutter, the UN poverty envoy, who stated that the coming wave of austerity "could violate the UK’s international human rights obligations and increase hunger and malnutrition.

[68] In 2023, Birmingham city council was forced to issue a 114 notice, effectively declaring bankruptcy, which drew attention to the level of cuts imposed on local government funding since 2010.

The Guardian termed this as 13 years of austerity within the local government funding context, however £840m of the councils debts are attributed to equal pay claims and IT implementation failures.

[79] In the summer of 2024 the Labour government introduced the means-testing of the Winter Fuel Payment, an annual grant paid to people of pension age, while refusing to relax restrictions on some other benefits.

According to the Chartered Institute of Public Finance and Accountancy (CIPFA), there were 3,583 library branches in England, Wales and Scotland that collectively employed 15,300 people alongside 51,000 volunteers in 2019.

This was due to the fact that black and Asian women were more likely to be employed in the public sector, be in low-paid jobs and insecure work, and experience higher levels of unemployment than other groups.

[9] However, the Organisation for Economic Co-operation and Development found that the number of people answering yes to the question "Have there been times in the past 12 months when you did not have enough money to buy food that you or your family needed?"

Rob Whiteman of CIPFA commented that "this scale of job losses reflects the intense financial pressure on councils as they now have no option other than to provide the bare minimum statutory provisions".

[153] Research by the University of Cambridge published in 2018 said that the greatest reductions in local authority spending had occurred in impoverished post-industrial cities in the north of England and some poor Inner London boroughs.

[154] A survey of council leaders, chief executives and mayors conducted by the New Local Government Network indicated that more than 70% of respondents expected that they would be unable to provide non-statutory services beyond 2023 if funding remained as restricted as it had been since 2010.

[159] A 2016 report authored by the NatCen Social Research for UNISON showed that LGBT people had suffered from a lack of access to mental health services as a result of austerity.

Public Health England was asked to carry out a review of life expectancy trends but government ministers said that the arguments put forward by some academics, that austerity had contributed to the change, could not be proved.

[175][176] By 2015 the number of people employed in the Civil Service had been reduced to the lowest level since the Second World War and public sector employees made up 17.2% of the total workforce, the smallest proportion since comparable records began in 1999.

[184] The policy of suspending the social security payments of unemployed claimants who were judged not to be adequately seeking work was continued, and the frequency and severity of the sanctions were increased.

Research by the Institute for Fiscal Studies (IFS) in 2017 found that the household incomes of over one million women aged between 60 and 62 had become £32 a week lower on average, and that poverty rates among that group had risen.

[193] However, the UK government has sought to recoup the expected savings through a fine on Northern Ireland's block grant, which is calculated according to the Barnett formula, and which fell by 8% in real terms between 2010 and 2015.

[194] In 2017 the Conservative–DUP agreement resulted in an additional £1 billion of public sector funding for Northern Ireland over two years, with the money focused on the health, infrastructure and education budgets.

Andrew Gamble writing in Parliamentary Affairs in 2015 commented:[196] Most macroeconomists now agree that the austerity programme pursued by the Coalition Government in its first two years was both too severe and unnecessary and set back the economic recovery which was underway in the first half of 2010.

The Office of Budget Responsibility confirmed that the austerity programme reduced GDP, while the Oxford economist Simon Wren-Lewis has calculated that the Coalition Government's austerity programme cost the average household £4000 over the lifetime of the Parliament and severely damaged those public services which were not ring-fenced.Ha-Joon Chang, writing in 2017, observed that "in today's UK economy, whose underlying stagnation has been masked only by the release of excess liquidity on an oceanic scale, some deficit spending may be good – necessary, even".

[9] Peter Dominiczak (political editor at The Daily Telegraph) wrote that because spending on the NHS and foreign aid is ring-fenced, "other Whitehall departments will face savage cuts to their budgets".

[2] The 2017 general election was held almost three years earlier than scheduled under the Fixed-term Parliaments Act 2011, in an attempt to increase the Government's majority to facilitate the Brexit process.

The Conservative manifesto pledged to eliminate the deficit by the "middle of the next decade",[214] an aim which the Institute for Fiscal Studies (IFS) said would "likely require more spending cuts or tax rises even beyond the end of the next parliament".