WBG responds to Rachel Reeves’ statement on public finances

Responding to Rachel Reeves’ statement on public finances, Dr Sara Reis, Deputy Director and Head of Policy and Research, said,

“After more than a decade of austerity and several serious crises that have affected the economy, it is no wonder that public finances are in bad shape. More worryingly, our public services are crumbling and people’s living standards are falling. We need responsible government intervention to make the right investments and stabilise the public accounts.

“Yesterday’s speech by the Chancellor painted a picture of mismanagement and obfuscation by the previous government. WBG would like to see a serious commitment from the new Government to protect and invest in public services in a responsible and financially sustainable way, which could include a combination of more progressive taxation and borrowing.”

Junior doctors’ pay rise

“We welcome the Government’s decision to offer a 22% pay rise to junior doctors – these are essential workers who have had a real-terms salary cut since 2010. A pay rise is overdue. At a time when we have record numbers of working-age people out of the labour market due to ill health and long NHS waiting lists, a valued and motivated healthcare workforce is more needed than ever. Junior doctors and other essential workers need to be paid properly if we are to value and retain them. This is true across all public services so we encourage Rachel Reeves to accept the decisions of the other independent pay review bodies.”

Departmental savings

“We are concerned that civil servants are being required to make cuts and that these will affect the delivery of services that the public and the economy rely on. The language of finding savings and efficiencies is all too familiar from the decade of austerity in the 2010s – we are reaping the consequences of those decisions at the moment, with crumbling schools, overflowing hospitals, and recruitment and retention crises in healthcare, social care and other essential sectors. Going forward, funding settlements for each department should be based on need and cover their ability to provide high quality services and fair wages to public sector workers.”

Increasing productivity in public services

“Calls for increasing productivity in the public sector come with risks. The use of AI is particularly concerning when applied to social security and public service delivery: delegating benefit decisions to AI is problematic because of algorithmic bias against groups of vulnerable claimants ¹ . Scaling that up can result in too many vulnerable people missing out on essential income.

“Moreover, increasing productivity to reduce costs is not possible or desirable in many essential services like social care, childcare and to some extent healthcare. These are services that rely on establishing a good relationship between provider and user so increasing productivity will compromise quality and/or workers’ pay and conditions.”

Winter Fuel Payments

“Energy bills for next winter are predicted to be 10% higher than a year ago ² . We will see an unacceptably large number of people struggling in the cold weather. We echo concerns from old age charities and others on the Chancellor’s decision to limit the winter fuel payments (WFP) to pensioners receiving means-tested benefits. This is because there are 850,000 eligible pension-age people who are currently not claiming benefits and so would lose out on WFP. Conditioning receipt of WFP on other means-tested benefits should not happen without a massive drive to increase take-up of the latter. Otherwise, too many low-income pensioners will lose out.”

Public accounts transparency

“We welcome measures to improve transparency and scrutiny of Treasury spending decisions. It is important that independent scrutiny bodies like the OBR have all the data and information they need at their disposal to do their job well.

As part of this drive to improve spending accountability, we would like to see a commitment from the Treasury and other state departments to conduct and publish Equality Impact Assessments (EIA), as part of public bodies’ responsibilities under the Public Sector Equality Duty. EIAs are the best way to show the Treasury has taken due regard to equality in its spending and revenue decisions.”

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WBG spokespeople available for interview, contact press@wbg.org.uk / 07553663144