‘Impossible numbers’: where could Jeremy Hunt’s budget cuts fall? | Budget 2024 (spring)

By now it has become a familiar feature of Jeremy Hunt’s fiscal statements. In order to entice voters with tax cuts, the chancellor has baked in significant public spending cuts backdated after the next general election.

Hunt’s spring budget on Wednesday included billions in cuts, the impact of which would not fall equally across departmental budgets because some of them – including schools and the NHS – are protected.

Under the Treasury’s assumptions, “unprotected” government departments will have a 13% real-terms cut in their budgets from 2025-26 to 2028-29. This collectively amounts to a £19bn cut, comparable to the round of austerity heralded by David Cameron and George Osborne in 2010.

Crucially, virtually no one thinks these cuts will actually be implemented, not least because the Conservatives are unlikely to be in government from 2025 onwards.

Torsten Bell, the chief executive of the Resolution Foundation thinktank, said: “The £19bn of cuts to unprotected public services after the next election are three-quarters the size of those delivered in the early 2010s. The idea that such cuts can be delivered in the face of already faltering public services is a fiscal fiction.”

Nick Davies, the programme director for public services at the Institute for Government, said: “The government has not spelled out in any detail how the impossible numbers that it has pencilled in would be delivered on a department-by-department basis.”

With no spending review taking place before the election, the responsibility for working that out is going to fall to the next government. This is where the cuts are expected to take place:

Justice

Experts believe the department bearing the brunt will be the Ministry of Justice, which is already grappling with overflowing prisons and a huge courts backlog.

The department estimates the prison population in England and Wales could reach more than 100,000 within two years under its higher population projections.

The budget came on the same day that a senior judge announced plans to clear 181 rape cases that have been delayed at the crown court for more than two years – a stark illustration of the pressures the system is already under.

The announced cuts offer little hope of stemming a tide of lawyers quitting rape and sexual assault cases – 64% of prosecutors in such cases said they planned to stop such work, mainly because of low fees – and criminal cases more generally.

Equally, the budget offers little hope of addressing the crumbling court estate, which also causes delays. The government has a fairly modest target of getting the backlog in crown courts down to 53,000 by next March (it was 37,000 before Covid) but even that looks difficult to achieve at the moment, with the figure now more than 65,000.

“The justice department is one where, as the population grows, the demands on it could grow,” said Emily Fry, a senior economist at the Resolution Foundation. Her analysis suggests the MoJ would need a budget increase of 5% per capita between 2024-25 and 2028-29, rather than the 13% cut pencilled in.

Davies said: “The idea that you can make substantial cuts to those services, whilst also successfully managing a huge increase in demand, is extremely fanciful.”

Home Office

The area where the Home Office spends most is the police. Cuts in this area or other big spending streams such as border control would be politically unpalatable for any government.

In recent years ministers have increased police numbers after cutting them significantly in the early 2010s, partly by offering experienced officers voluntary redundancy. Rishi Sunak announced last year that his party had met its 2019 manifesto commitment to recruit 20,000 new officers.

“You have to question whether it’s realistic that they would see substantial cuts in police officer numbers,” Davies said.

“One of the big public service achievements of this Conservative government has been the police uplift programme. Is Jeremy Hunt really saying that, if by some miracle he is chancellor after the next election, he is going to unwind the signature criminal justice policy of his current government? That seems very unlikely.”

Fry added: “The Home Office is one of the only protected departments that’s actually bigger in 2024-2025 than it was in 2010-2011 in real terms.”

Local government

It is harder to tell what the overall impact of cuts would be on local government spending power because councils can offset the costs to their central government funding with increases in council tax.

There has already been a hollowing out of a lot of local government services. Councils are spending more than they used to on children’s social care, adult social care and other statutory duties such as homelessness. In order to pay for this, councils have stripped back other services such as library provision and youth centres.

“There’s not much left that can be squeezed by local authorities,” Davies said. “We’ve already seen a wave of section 114 notices, which is the local authority equivalent of bankruptcy.

“Although in most of those cases to date, it’s been the result of some financial mismanagement, there are many more local authorities that have managed as well as they could that are very close to the edge, and I think it’s very likely that we will see more section 114 notices issued in the coming years.”

This would cause councils to cut statutory services more severely than they otherwise would and sell off critical assets.

Transport

High rates of inflation have been making capital programmes overseen by the Department for Transport more expensive in recent years.

Further spending cuts look particularly stark and may well have a political impact in areas such as the north of England, where the scrapping of the HS2 line from the West Midlands to Manchester became a flashpoint last year.

Plans for more smart motorways have also been cancelled, although the government last year promised it would continue to invest in existing smart motorways through £900m of improvements.

Dr Maya Singer Hobbs, a senior research fellow at the Institute for Public Policy Research and a transport expert, said: “If previous cuts to transport budgets are a guide, then both as yet uncosted schemes and local authority transport spending will be at risk.

“This includes much of the Network North plan which replaced the northern part of HS2 last year, and has been criticised for a lack of detail and poorly costed proposals.”

A portion of transport funding now allocated to combined and local authorities to spend could also be at risk, she added, including spending on much-needed local public transport networks outside London.

Prof John Kelsey, from the Bartlett School of Sustainable Construction at University College London, said: “The government might consider cuts when it comes to transport infrastructure, but if it does so when it comes to repairs then we will have even more potholes in the road. If it defunds the major trunk roads then you are going to have problems with lane closures and works.”

Unions have already raised concerns about cost-cutting measures at Network Rail, which manages most of Britain’s railway network.

Culture

In the arts, there was a welcome in some quarters for aspects of the chancellor’s budget – such as a decision to keep high rates of theatre tax relief.

It was hailed by figures such as Andrew Lloyd Webber as a “lifeline”, while tax breaks for the film and television sector were also among the positive headlines from the budget.

But the arts sector already faces existential threats from cuts to local authority budgets. They include the complete defunding of arts organisations in places like Birmingham and Suffolk.

Among those who welcomed some of the headline announcements were Paul Fleming, the general secretary of the arts union Equity, but he cautioned that they “come in the context of two decades of austerity in our industries”.