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If I could turn back time

    Following on from last week's blog post on cuts, I have been reviewing the projected scale of government spending in each department by 2014/15.

    I thought it would be good to share the data with you to show the scale of real spending across different departments by 2014/15 - and how far this takes the area back in real terms:

    Department      2014/15 spend      Year of equivalent spend

    Health                   £121 bn                  *protected*

    DfID                      £10 bn                 increase of £4bn

    Pensions                £116 bn                   2009 level

    Education              £74 bn                     2004 level

    Defence                £48 bn                  increase of £4bn

    Welfare                 £101 bn                   2009 level

    Protection             £26 bn                     2002 level

    Transport              £17 bn                     2002 level

    General Govt         £21 bn                      2004 level

    Other                   £59 bn                     2005 level

    Interest                £55 bn                  increase of £24bn

    Total                    £648 bn                 2009 level

    This largely confirms what I wrote last week - namely that the scale of the cuts in some departments has had to be relatively large in order to compensate for protected NHS and DfID spending, coupled with increasing interest payments.  But even for the departments suffering large cuts in real terms, the worst case scenario is returning to 2002 levels of funding.

    The problem that departments face is that, compared with 2002, many public sector employees have enjoyed substantial increases in real wages. This means that although funding levels might be the same, the scope for the provision of services is lessened because more of the expenditure must be set aside for wage costs. As the government has not had the will to enforce real public sector wage cuts to meet these spending targets, this means that either some services have to be sacrificed or else employees laid off.

    Ryan joined the Centre for Policy Studies in January 2011, having previously worked for a year at the economic consultancy firm Frontier Economics.

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