The Government’s pledge to find £12bn in savings from the welfare budget will require ‘significant cuts’ to non-protected benefits, says the Institute for Fiscal Studies (IFS).
Outside of protecting spending on state pension and universal pensioner benefits, the Conservatives would need to find savings on the a scale amounting to almost 10% of unprotected benefits, just to meet their 2015 manifesto pledge.
The IFS says, “finding the sought after £12 billion of cuts in just two years will not be easy”.
“Finding such a reduction without cutting child benefit, which has been pledged this week, would mean that even more significant cuts would likely be required to spending on one or more of tax credits, housing benefit and disability & incapacity benefits”.
Chancellor George Osborne has been accused of “misleading” the public on the extent of planned cuts.
To meet its overall spending target, even after slashing £12bn from welfare expenditure, the government would still need to accelerate cuts to other unprotected government departments.
Other than the Department for Work and Pensions (DWP), unprotected departments include the Ministry of Defence, the Home Office, the Ministry of Justice, the Department for Communities and Local Government, the Department for Business, Innovation & Skills, and the Department for Transport.
According to the IFS, “cuts would need to increase from the 2.0% a year seen over the five years from 2010–11 to 2015–16, to 2.2% a year over the three years from 2015–16 to 2018–19”.
“This would give a total cut of £23.8 billion across all departments between 2015–16 and 2018–19. That’s on top of the £2.2 billion of cuts taking place in 2015–16 and the £49.2 billion of cuts delivered between 2009–10 and 2014–15.
“Protecting defence from any further real cuts – which would still leave its budget falling further as a share of national income – would increase the cuts elsewhere over the next three years to 18.7%, and the cuts over the eight years from 2010–11 to 36.9%.”
SNP MSP Kenneth Gibson said: “The cuts agenda of George Osborne and the Tory government was already widely discredited and economically illiterate – and today the IFS have delivered a further blow to the Chancellor’s credibility, in addition to yesterday’s report from the OECD saying deep spending cuts are hampering economic growth.
“Not content with delivering these cuts to public services, it now emerges that the Tories have been misleading people about the extreme scale of the cuts needed to meet their targets.”
Chancellor George Osborne will detail how the government will cut £12bn from the welfare bill in an ’emergency budget’ in July of this year.