Magazine article Public Finance

Year of Living Dangerously

Magazine article Public Finance

Year of Living Dangerously

Article excerpt

2010 was a year of two halves - literally for the two of us who served as CIPFA presidents. Our half years of office coincided pretty closely with those of the old and new British governments - and our annual conference in June represented a watershed between two eras.

The terrible fire at Harrogate's Majestic Hotel just before the conference began was an ominous symbol of what might be in store for public services.

Then, as now, the public finance deficit was never far from our minds. The big controversy was about the timing of spending cuts. Should the government take the aggressive approach, perhaps risking an adverse import on the economic recovery, or should it take a longer timescale, risking damage to market confidence?

The initial plans were laid out in the March Budget by then chancellor Alistair Darling. The objective in broad terms was to halve the deficit over the next Parliament.

Post-election, the dilemma remained the same, but the coalition plan was to deal with the whole of the current structural deficit within the lifetime of the Parliament.

As CIPFA's presidential changeover loomed, the new government made two announcements. The first was a £6bn cuts package, which wasn't particularly strategic but was symbolic and a declaration of intent.

The second was the Emergency Budget in June, which showed that the government intended a 20:80 split between increasing taxation and reducing spending. The majority of the additional tax would come from raising VAT and the parameters for the 80 % reduction emerged as cuts of between 25 % and AO % for most government departments. Health and overseas aid spending were singled out for protection.

As the cuts were greater than anything seen in postwar Britain, media attention shifted dramatically to them rather than to the tax decisions.

CIPFA and the Society of Local Authority Chief Executives and Senior Managers recognised that this represented the greatest challenge for public sector leaders, including finance professionals, in a generation. In response, the two organisations resolved to continue their series of papers that had begun with the seminal After the downturn.

The follow-up publication. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.