Saturday, February 28, 2009

(Very) lean years for public services: it’s official

There has been lots of media coverage of the Times article by the Audit Commission chief executive Steve Bundred about public debt Armageddon. This sentence effectively summarises his warning to the public and third sectors

Any managers of a public service who are not planning now on the basis that they will have substantially less money to spend in two years time are living in cloud-cuckoo-land.

Interestingly Bundred gets his history wrong when he says Mrs Thatcher secured an opt-out from the Maastricht Treaty on public debt levels. (She had retired to he House of Lords by 1992 and indeed attacked the Treaty.) However, he is right to ring the alarm on the implications of public debt levels for public services – whoever wins the election. The inevitability of the forthcoming lean years were clear to those who looked but the implications of the credit crunch and recession upon public borrowing have been less foreseeable twists.

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