Sun, 01 Jun 2025

Sun, 01 Jun 2025 IFS says tough public spending choices unavoidable

With the NHS and defence getting more funding, cuts to other areas are inevitable, the influential think tank says.

* The government's Spending Review on June 11 will involve "unavoidable" tough choices, according to the Institute for Fiscal Studies (IFS).
* Funding for areas such as health, defence, schools, and transport will increase in 2024, but then slow down.
* NHS spending is set to be £202bn in 2025-26, which could lead to cuts in other "unprotected" departments.
* The IFS warns that increasing health funding at the historical average rate would mean imposing real-terms cuts on other areas, including the criminal justice system.
* The level of health spending is seen as a central trade-off for the Spending Review and will become starker if defence spending is increased further or faster than planned.
* The Treasury faces "unavoidably tough choices" due to the slowing down of additional funding after a surge last autumn.
* The government has committed to increasing defence spending, which could lead to bigger cuts in other areas.
* The IFS suggests that improving productivity in public services could help deliver better services within lower budgets.
* However, this would be a challenge given that productivity in public services is currently below pre-Covid levels.
* A government spokesperson said the government is "delivering what matters" for working people, but the IFS warns that cuts to public sector pay have led to strikes in the past and could pose serious challenges.
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