Transcript The future of British government and public finance

The future of British government
and public finance
Tony Travers
LSE
There has been a long-term decline in
CON+LAB voting
From over 97% in the 1950s to 65% in 2010 (may recover slightly in 2015?)
But there has been a differential regional decline for the Conservatives
and Labour
The Conservatives have declined fastest in the urban North, North West
and Scotland, while Labour have been similarly affected in the rural East,
South East and South West
Conservatives can still win in the affluent, rural, north and similarly Labour
can win in the inner-urban south
It has become ever-harder for the ‘major’ parties to win a general election
outright
General Elections: Great Britain
Source: Derived from statistics in (1) British
Electoral Facts 1832-1999, by C. Rallings &
M. Thrasher; (2) House of Commons Library
North (NW + NE)
Source: Derived from statistics in (1) British
Electoral Facts 1832-1999, by C. Rallings &
M. Thrasher; (2) House of Commons Library
Conservative decline in northern met.
districts - 1
Manchester
Knowsley
Liverpool
Gateshead
CON
LAB
1978
46
53
0
0
2010
0
62
33
1
1978
18
42
2
1
2010
0
53
10
0
1978
24
40
35
0
2010
0
48
37
5
1978
14
56
5
2
2010
0
45
20
1
Sources: (1) Local Elections in Britain: A
Statistical Digest, C Rallings & M Thrasher;
(2) BBC
LIB/LD OTHERS
Conservative decline in northern met.
districts - 2
Newcastle
Sheffield
CON
LAB
1978
33
40
3
2
2010
0
34
42
2
1978
24
60
6
0
2010
0
39
42
3
Sources: (1) Local Elections in Britain: A
Statistical Digest, C Rallings & M Thrasher;
(2) BBC
LIB/LD OTHERS
The Midlands, 2005 and 2010
Conservatives
Labour
Liberal Democrats
GB
EM
WM
GB
EM
WM
GB
EM
WM
2005
33.2
37.1
35.0
36.1
39.0
38.7
22.6
18.5
18.6
2010
36.9
41.2
39.5
29.7
29.8
30.6
23.6
20.8
20.5
South East + East: GSE excl London
Source: Derived from statistics in (1) British
Electoral Facts 1832-1999, by C. Rallings &
M. Thrasher; (2) House of Commons Library
South West
Source: Derived from statistics in (1) British
Electoral Facts 1832-1999, by C. Rallings &
M. Thrasher; (2) House of Commons Library
London
60
50
40
Con
30
Lab
Lib/LD
Others
20
10
0
1955 1959 1964 1966 1970 1974 1974 1979 1983 1987 1992 1997 2001 2005 2010
(F)
(O)
Source: Derived from statistics in (1) British
Electoral Facts 1832-1999, by C. Rallings &
M. Thrasher; (2) House of Commons Library
Scotland
60
50
40
Con
Lab
30
Lib/LD
SNP
20
Others
10
0
1955 1959 1964 1966 1970 1974 1974 1979 1983 1987 1992 1997 2001 2005 2010
(F)
(O)
Source: Derived from statistics in (1) British
Electoral Facts 1832-1999, by C. Rallings &
M. Thrasher; (2) House of Commons Library
A problem for the Conservatives and
Labour….
There are significant areas of the country where the major, traditional, parties’
vote share has declined precipitously, though the Midlands remain more
‘traditional’
Unless the major parties can re-establish themselves in these places and with
lost voters (in all areas) they are less and less likely to win an election outright
and could, potentially, be overhauled by an insurgent party
Where will Liberal Democrat votes go if the party’s share declines
permanently to below its pre-2010 level?
Can UKIP win (1) protest; (2) former Conservative and (3) ‘working class’
Labour votes? Can the SNP damage Labour in Scotland and thus nationally?
Key challenge: how can the Conservatives and Labour re-connect with these
people and in places where decline has occurred?
Taxation and public expenditure
as % of GDP
49
Forecast
47
Per cent of GDP
45
43
41
39
37
35
33
1978-79
1982-83
1986-87
1990-91
1994-95
Current receipts
1998-99
2002-03
2006-07
2010-11
2014-15
2018-19
Total managed expenditure
Source: O NS, O BR. Excludes Royal Mail and APF transfers.
Source: Office for Budget Responsibility, Economic and fiscal outlook Charts and Tables, March 2014, Chart 1.1
Local government current expenditure
2009-10 to 2013-14
2009-10
2010-11
2011-12
2012-13
2013-14
Highways & transport
Social care
Children’s
Adults
Housing
6541
20963
6396
14567
2715
5669
21062
6654
14408
2482
5380
21160
6423
14738
2103
4823
21136
6612
14524
1997
4775
21526
6952
14574
2017
-27.0
+2.7
+8.7
0
-25.7
-32.3
-4.8
+0.7
-7.3
-31.2
Culture, env’t, planning
Cultural
Environment
Planning
Police
11083
3465
5308
2310
12022
10675
3278
5201
2197
11948
9741
3021
5068
1652
11650
9407
2940
5036
1430
11337
9193
2836
4986
1371
10920
-17.1
-18.2
-6.1
-40.6
-9.2
-23.1
-24.2
-12.9
-45.0
-15.8
Fire & rescue
Central services
2177
3771
2165
3608
2118
3344
2119
3412
2099
3281
-3.6
-13.0
-10.7
-19.4
59272
59272
57609
56144
55496
52876
54231
50904
53811
49375
-9.2
Total - cash
Total - real
% change
cash
real
-15.9
Sources: (i) DCLG Local authority revenue expenditure and financing statistics, 2009-10 to 2013-14
(ii) GDP deflator: Public Expenditure Statistical Analyses 2014, Table F2
Note: omits education, public health and other services where year-to-year comparability is impossible
Current expenditure
- Central and local government
CENTRAL
2009-10
2010-11
2011-12
2012-13
2013-14
% change
cash
real
Debt interest
International development
Health (UK)
Social security
Education (UK)
Defence
30497
5234
110737
221948
78550
33652
45165
5909
114437
229380
82351
34982
48375
6167
116987
239401
79108
35056
47549
6105
119491
250046
80358
32899
47384
8074
125551
251481
83468
33167
+55.4
+54.3
+13.4
+13.3
+6.3
+1.4
CG total – cash (UK/Eng)
CG total – real (UK/Eng)
448750
448750
475986
463873
490874
467783
506384
477384
515204
477491
+14.8
LOCAL [England]
2009-10
2010-11
2011-12
2012-13
2013-14
Social care
Fire & rescue
Police
Central services
Culture, env’t, planning
Housing
Highways & transport
20963
2177
12022
3771
11083
2715
6541
21062
2165
11948
3608
10675
2482
5669
21160
2118
11650
3344
9741
2103
5380
21136
2119
11337
3412
9407
1997
4823
21526
2099
10920
3281
9193
2017
4775
+2.7
-3.6
-9.2
-13.0
-17.1
-25.7
-27.0
LG total - cash
LG total - real
59272
59272
57609
56144
55496
52876
54231
50904
53811
49375
-9.2
+44.0
+43.0
+5.1
+5.0
-1.5
-8.7
+6.4
% change
cash
real
-4.8
-10.7
-15.8
-19.4
-23.1
-31.2
-32.3
-15.9
Sources: (i) Public Expenditure Statistical Analyses, 2014, Tables 1.1; 5.4 and 6.2; (ii) DCLG Local authority revenue expenditure and financing statistics, 2009-10 to 2013-14;
(iii) GDP deflator: Public Expenditure Statistical Analyses 2014, Table F2
The future of ‘unprotected’
expenditure
Local government current expenditure
2013-14 to 2018-19 (projected)
England
2013-14
2018-19
% change
cash
real
Highways & transport
4775
3110
-35.0
-40.4
Social care
21526
21885
+1.7
-6.9
6952
7571
+8.9
0
Housing
14574
2017
14313
1346
-1.8
-33.3
-8.4
-38.9
Culture, env’t, planning
9193
7105
-22.7
-29.2
-
Children’s
-
Adults
-
Cultural
2836
2083
-26.6
-32.7
-
Environment
4986
4383
-12.1
-19.5
-
Planning
Police
1371
10920
642
9502
-53.2
-13.0
-57.1
-20.3
Fire & rescue
2099
1971
-6.1
-14.0
Central services
3281
2700
-17.7
-24.6
53811
53811
47623
43610
-11.5
Total - cash
Total - real
-19.0
Sources: (i)2013-14 expenditure figures taken from DCLG Local authority revenue expenditure and financing statistics, 2009-10 to 2013-14;
(ii) 2018-19 expenditure figures estimated by applying annual average cash percentage changes for each service from 2009-10 to 2013-14 to the period
2013-14 to 2018-19. Note: service-by-service figures scaled to fit total; , (iii) GDP deflator: OBR, Economic and Fiscal Outlook charts and tables –
March 2014, table accompanying Chart 3.27;
Local government current expenditure
2009-10 to 2018-19 (cumulative, projected)
England
2009-10
2018-19
% change
cash
real
Highways & transport
6541
3110
-52.5
-59.7
Social care
20963
21885
+4.3
-11.4
6396
7571
+18.4
+0.5
14313
1346
-1.7
-50.4
-16.6
Housing
14567
2715
Culture, env’t, planning
11083
7105
-35.9
-45.6
-
Children’s
-
Adults
-57.9
-
Cultural
3465
2083
-42.8
-49.0
-
Environment
5308
4383
-17.4
-29.9
-
Planning
642
9502
-72.2
-21.0
-76.6
Police
2310
12022
-32.9
Fire & rescue
2177
1971
-9.5
-23.2
Central services
3771
2700
-28.4
-39.2
59272
59272
47623
40418
-19.7
Total - cash
Total - real
-31.8
Sources: (i)2013-14 expenditure figures taken from DCLG Local authority revenue expenditure and financing statistics 2009-10;
(ii) 2018-19 expenditure figures estimated by applying annual average cash percentage changes for each service from 2009-10 to 2013-14 to the period
2013-14 to 2018-19. Note: service-by-service figures scaled to fit total; , (iii) GDP deflator: (i) Public Expenditure Statistical Analyses 2014, Table F2 and
OBR, Economic and Fiscal Outlook charts and tables – March 2014, table accompanying Chart 3.27;
Local government to be a major
contributor to the shrinkage of the State
• UK State is about to shrink to 36% of GDP
• Local government, Defence, civil service,
BIS, etc to take most of the pressure
• Councils will survive but be very
different….
The future of British government
and public finance
Tony Travers
LSE