All eyes this week are on Rishi Sunak to see how many rabbits he can pull out of his hat when he delivers both the budget and the spending review this Wednesday lunchtime. It’s tricky, and if he pulls it off he will be the magician of the year. His commitment to drive growth while keeping the public finances on a sustainable path is laudable but seems impossible, especially given there is a looming crisis developing with the NHS this winter.
A budget of competing priorities
The stakes are high as Bronwen Maddox pointed out in a recent Financial Times piece and Sunak will have to be pretty Janus-faced to appease the low-tax brigade of his party and the public’s desire for a much-needed injection of cash into public services.
Sunak has a lot to square. The ending of the public sector pay freeze is welcomed and there are some other eye-catching announcements already heavily trailed. But the politics of other stuff hangs heavy in the air. We have the worst supply-chain problems we have seen since the 1970s, as inflationary pressures continue. Levelling up needs to be turned from a soundbite into a reality in those hard-won red wall seats. And the government needs to recognise that however much they nuance it, the #shitgate saga over the weekend suggests the public don’t trust them on the environment.
Long-term issues predate the pandemic
The government may portray recent ills down to covid but the real issue is that many of the problems that the country faces are not just down to the pandemic. Long-term structural issues were evident before the pandemic – and after 11 years in office, the Conservatives have sadly done little to alter the dial on these.
Local authorities went into the pandemic in a pretty bad shape. Austerity measures cut grants to local authorities by almost half (49.1 percent), between 2010/11 and 2017/18 according to Sheffield City Council. Their recent revenue budget predicted an overall funding gap of approximately £72m between 2021/22 and 2024/25. Growth in demand for services and inflation costs continue to outstrip additional funding and the pandemic adds to further uncertainty.
There are some other stark features of life in Britain 2021. Life expectancy at birth and age 65 in the UK had been increasing, but then slowed around 2011 according to the Lancet. Our performance relative to the other EU member states has been poor since 2011. More recently, the Lancet found that in the decade before the Covid-19 pandemic, life expectancy declined in increasing numbers of communities in England.
Poverty in Sheffield
A recent poverty summit in Sheffield acknowledged that the pandemic had deepened the inequalities that already existed there. Those already struggling the most have been the ones hit the hardest.
Greg Fell, Sheffield’s director of public health, spoke at the summit about the pandemic and poverty – though you don’t have to be a director of public health to know that living on a low income is bad for your health. He reminded us that what is needed is a health-led recovery not a growth-led recovery, and said that health should be treated as a national infrastructure project, much like HS2.
There is much to suggest that putting the emphasis on growth at the expense of health or quality of life actually exacerbates inequality. The atlas of inequality developed by Sheffield University shows just how deep the divisions are in the city. It also shows the very visible east-west split between the Sheffield neighbourhoods that are among the most deprived nationally, and the least deprived nationally.
People are coming out of the pandemic frailer, and that will cast its own shadow. As Debbie Matthews from Manor and Castle Development Trust said at the summit, covid has exacerbated issues for those who live on the margins and those suffering poverty. Universal credit delays caused massive problems, and that’s before the cut to the £20 a week uplift. In places up and down the country, not just Sheffield, people have to make tough choices – eat or be warm. Whichever choice they make they will inevitably get into debt.
Will this budget build back fairer?
After the 2021 spring budget, Sheffield’s Citizens Advice Bureau and Shelter produced a briefing paper on the financial cliff edge facing people and the disproportionate impact on the poorest communities. “Whilst the budget did signal limited extensions to some of the protections, the insecurity and fear of the future is an intolerable weight for many and the unresolved problems are building.”
What comfort and relief will the autumn budget offer to people living on the margins and those families in the most deprived communities? That should be the litmus test of this budget – a reduction in food banks, and an end to reliance on loan sharks. The problem is that inflationary pressures and heating bills in particular may wipe out any gains by increases to the national minimum wage (according to the Mirror, “even a 2 percent or 3 percent rise in public sector wages would likely become a real-terms cut due to inflation”).
Ultimately, the test of a successful budget should be how much it is the test of a fair and compassionate society. The government urgently needs to change its mantra from Build Back Better to Build Back Fairer (as the Health Foundation so eloquently puts it). Or, as campaigner Jack Monroe wrote recently in the Independent, “The long term impact of austerity ideology and the resulting inequality chasm is only just starting to become evident, and the evidence should horrify and alarm us all”.