Regulaton & Policy
Is Government Cost-Cutting Really Starting To Hurt the UK?

A series of terrible events in the UK in the last few weeks has put the spotlight on government expenditure, as well as raising many other issues of course. The Manchester bombing at the Arianne Grande concert, the London Bridge terrorist attack, and the tragic fire in west London have all led to discussion, much of it political, around “austerity” and whether the “cuts” in public expenditure are in any way to blame for these events.

There have been accusations for instance that cuts to police forces have meant potential terrorists have not been scrutinised as they should have been. Cost-cutting in building refurbishment might end up being partly to blame for the fire. A general sense that the poor in the UK are being treated badly while the rich get richer might yet lead to the collapse of the newly elected government.

One irony is that the government expenditure has not even dropped in recent years. In 2010, the UK government spend some £670 billion. By 2016, that figure is around £760 billion. So why does it feel like austerity and cuts have been significant? Well, the population has grown by some 5% in that time, so that is a factor. The cost of servicing the national debt has grown; and spend in areas such as overseas aid and health has been protected, putting more pressure on other areas…

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