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We need a social budget

“Tackling the deficit is essential, but it is not what we came into politics to achieve.”(1) Next week’s emergency budget, called to make a start on reducing the deficit, should therefore show early signs of the government’s promised new approaches – not just to budget responsibility but also to its wider programme of social reform. Fixing the economy and fixing society are inseparable: we need a social budget as well as a fiscal budget.

The budget begins with a description of the state of the economy - spending, growth and taxation. It is expected to set out a clear plan to restore the public finances to good health. The interim Office of Budget Responsibility has been set up to “make an independent assessment of the public finances and the economy”. Figures have been pored over in great detail before particular cuts have been decided.

However, we are concerned the budget will lack any assessment of the fiscal implications of social changes. Strengthening families and building the ‘Big Society’ are expected to do a fair bit of the heavy lifting in terms of reducing demand pressures on services and their consequent costs, as well as achieving improved social outcomes.

The budget will be painful for many. The government is assuming that the ‘Big Society’ will step up and fill much of the gap left by the retreating state. Can it fill the void? How can we know? The reality is that no-one knows because the budget contains no social projections and forecasts. There are likely to be pages of information on the nation’s economic assets and liabilities, but nothing on its social capital.

The government has recognised the role of the family in achieving improved outcomes in education, health, welfare and justice with the creation of the new Task Force on Childhood and Families. It will develop its proposals in the context of the comprehensive spending review, establishing the link between social and economic policy. We recognise that Tuesday’s budget is an emergency measure but hope that future budgets will introduce social elements more fully and systematically into the budgeting process.
 

The budget is informed by the OBR’s growth projections – but who is projecting how much bigger society will be in 2015? The costs of debt interest will be set out – but what about the costs of social breakdown? The productivity of the economy and public services will be measured – but what about the capacity of families and civil society to deliver social outcomes? Our national wealth is economic, environmental and social. All three need to be accounted for, and policy tested for its impact on each.

The government has said it “will look beyond near-term pressures to support reforms that better position the UK for meeting long-term demographic, economic, environmental and social challenges, any of which could imperil long-term fiscal stability if left unaddressed.”(2) We wait to see if there is early evidence of this in the coming emergency budget.

ENDS

For more information please contact: Peter Lynas

p.lynas@relationshipsfoundation.org                  01223 341286                      07899 898066

NOTES TO EDITORS: 

1. The Coalition: our programme for government Available at http://www.cabinetoffice.gov.uk/media/409088/pfg_coalition.pdf

2. The Spending Review Framework June 2010. Available at http://www.hm-treasury.gov.uk/d/spending_review_framework_080610.pdf