Responding to the Chancellor's Autumn Statement Gillian Fawcett, head of public sector at ACCA (the Association of Chartered Certified Accountants) said:
"The Chancellor’s statement breeds ‘winters of discontent’ for most public services. Whilst money is being pumped into vital health services and infrastructure other services are being put out into the cold over the next five years – the squeeze is continuing in other parts of the public sector.”
"The outlook for public services is bleak. The public sector balance sheet for 2013 shows net liabilities of £1.6 trillion (but this excludes the state owned banks). If Government was a company it would be bankrupt. NHS hospital trust deficits in 2014 were reported to be £745million in deficit (a 150% increase compared to the previous year).
"This required an emergency injection of cash and now the government is pumping in another £2bn, in part made up of recycled underspends from other departmental budgets. Irrespective of the political short-termism employed here you can only recycle budgets so much before the money runs out. In addition, concerns about the financial sustainability of local authorities were highlighted by the NAO with 16% of single tier and county councils not being able to meet their budget plans and 52% of all councils not being able to fulfil their three year financial plans. On top of this the public sector has had a pay freeze of around three years with a below inflation pay rise of 1% in the immediate period up to the next spending review.
“There is little doubt that public services will have to think smarter and be braver about how they plan their future finances. It will be simply not good enough to approach budget cuts as ‘slicing the salami’ as there will come a time when there is ‘no salami left to slice’. The challenge for both government and public services is to rethink what sorts of public services are needed for a modern day society and plan the resources accordingly."