This morning’s Western Mail reports on the predictions of the Institute of Fiscal Studies that the Assembly Government faces the prospect of a freeze on its budget after 2011:
In the next spending review period (2011-14), the Treasury has pencilled in annual rises in overall UK public spending of 1.1% per year above inflation.
But the Institute for Fiscal Studies (IFS) says that this modest rise will be entirely wiped out by the increased social security spending as the recession deepens.
Ministers then face the prospect of cuts in each department’s budget, and the IFS estimates the Welsh block will effectively be frozen.
Cuts in other UK departments, including transport and the housing budget of the Department for Communities and Local Government, would also mean cuts in Wales through the knock-on effect of the Barnett formula.
A freeze in the Assembly Government’s budget – currently around £14.5bn a year – would be in stark contrast to the generous year-on-year rises seen in the early years of devolution.
It would also present a series of difficult choices for the winners of the 2011 Assembly election, and would provide a stark backdrop for the proposed referendum on giving Cardiff Bay greater powers.
The most important impact of such austerity as far as the Welsh Liberal Democrats are concerned is that it will help focus the attention of politicians on essential services and how they can be preserved rather than the freebie culture currently favoured by the One Wales Government.
Manifestos for the 2011 elections will need to be realistic and concentrate not so much on how we can do things differently as on how we can meet the needs of Welsh citizens with limited resources. It would help considerably if the present Welsh government adopted that attitude now rather than build up budgetary problems for the future with its skewed priorities.
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