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‘Difficult Decisions’: The Ultimate Price We Pay for Austerity

With more cuts to public services expected from Rishi Sunak’s Government, Rachel Morris tracks the outcomes of the controversial policy since 2010

Photo: PA/Alamy

‘Difficult Decisions’The Ultimate Price We Pay for Austerity

With more cuts to public services expected from Rishi Sunak’s Government, Rachel Morris tracks the outcomes of the controversial policy since 2010

In the first speech as Prime Minister, Rishi Sunak said that he would “place economic stability and confidence at the heart of this Government’s agenda” and that this would mean “difficult decisions to come”.

“Difficult decisions” is widely understood as more austerity – the macroeconomic model aimed at balancing public budgets.

It was pursued by the Coalition Government and has been carried on by the Conservatives, with its original stated aims to eliminate the deficit and reduce the national debt as a percentage of GDP by increasing taxes while reducing public spending. In reality, this has meant real-terms cuts to public services.

Although unemployment rose and growth remained low in the first austerity years, in 2013, David Cameron said that the cuts would be permanent, even if the deficit was defeated. A year later, the Treasury announced that austerity was to be extended until 2018. Both deficit and debt were reduced by then, but the outcome of the 2016 EU Referendum led Cameron to state that a balanced budget was no longer achievable.

By 2019, the end of austerity was signalled with successive budgets claiming its demise. However, the Institute for Fiscal Studies found that, with spending per capita 9% lower than in 2010, austerity was still in play. In 2020, it was concluded that there was nothing left to cut.

The vast increase in public spending brought about by the Coronavirus pandemic has increased the deficit. High inflation and taxation, the end of COVID support and the impact of Russia’s invasion of Ukraine have all combined to created a cost of living crisis.

Simon Clarke, Liz Truss’ short-lived Levelling Up, Housing and Communities Secretary recently declared a “new age of austerity” saying that the Government would “trim the fat” of a “very large welfare state”.

But what has the policy actually achieved across the UK since it was introduced in 2010?

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The Impact on Public Services

The correlation between austerity and the growth in food banks has been noted, with researchers linking budget cuts and benefit claimant sanctions to increased emergency food access.

Since 2010, the policy has also seen the cancellation of school building; reductions in spending on courts, local government, police, prisons, quangos, social security and welfare; public sector pay freezes or real-terms reductions; and VAT increases.

Arts and cultural funding was reduced by 20%. Nearly 800 public libraries and 64 museums closed, with an attendant loss of jobs.

Investment in new affordable homes was cut by 60%, and central government-imposed local authority borrowing caps hindered the power to raise home-building finance.

A penalty for under-occupancy – the so-called ‘bedroom tax’ – introduced in 2013, reduced the weekly incomes of 660,000 social housing tenants, almost two-thirds of them disabled. For private renters, rates used to calculate maximum housing benefit levels were frozen, which housing charity Shelter said would inflict a shortfall on 80% of tenants.

The Local Government Association found a funding decrease of nearly 60% between 2010 and 2020 for local authorities in England and Wales, with impacts on everything from bus services to Sure Start children’s centres.

More local authorities are at risk of insolvency. There were more than 220,000 local authority redundancies between 2010 and 2018. The impact was greatest in the already-poorer northern England and inner London areas.

University of Nottingham researchers found that austerity harmed working families with children in relation to housing policy and in-work benefits while benefitting wealthy pensioners and older homeowners.

Homelessness increased swiftly – by 16% in 2016 alone. More people living in temporary accommodation are employed, due to the housing benefits freeze, higher rents and social housing shortages. People sleeping rough in England doubled between 2010 and 2016, and more ‘hidden homeless’ stay with friends and family. According to the Office for National Statistics (ONS), deaths among the homeless increased by 24% between 2012 to 2017.

While English mental health trusts saw budget cuts, a 2015 report by Psychologists for Social Change linked the incidence and level of depression and other mental health issues to austerity – while the National Institute for Health Research linked it to an increase in suicides and attempted suicides.

In 2016, the Women’s Budget Group and the Runnymede Trust concluded that austerity most impacts women, people of colour, and especially women of colour. UNISON-commissioned research found that access to mental health services by LGBTQ+ people were damaged by austerity.

The Institute for Fiscal Studies found that austerity raised child poverty to its highest level since 2007, pre-pandemic. Half of all children with a lone parent are in relative poverty due to austerity cuts.

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The Cost in Lives

A 2017 study published in the British Medical Journal linking austerity to 120,000 deaths since 2010 was critiqued by some for failing to show cause and effect. Other reputable studies since connect austerity to increased self-harm, suicide and violence in prisons; increased suicides and antidepressants use among populations with mental health issues; and increased mortality for pension-age people due to income reductions.

In 2018, the United Nations’ Special Rapporteur on Extreme Poverty and Human Rights investigated the impact of austerity in the UK and concluded that it breached UN human rights agreements relating to children, disabled people, economic and social rights, and women – “entrenching high levels of poverty and inflicting unnecessary misery”.

ONS data of that year showed a decline in life expectancy for those in deprived areas and/or poorer socio-economic groups, and that overall life expectancy was plateauing. This was confirmed by the 2020 follow-up to the Marmot Review. Food safety, social capital, social care, equality, had all been stretched to breaking point.

The Office for Budget Responsibility has found that austerity has reduced GDP and most macroeconomists observe that it was unnecessary, harsh and delayed economic recovery.

When recovery arrived in 2013, austerity continued. Oxford economist Simon Wren-Lewis said it was as if the “real priority was and still is to cut all forms of government spending, and as if the deficit was… a convenient pretext”. The economics editor of The Independent agreed, writing that it was “essentially a political choice rather than an economic necessity, and the human costs have been huge”.

It is difficult to ascertain excess deaths linked to austerity between 2020 and 2022, due to the number of people who died because of the Coronavirus pandemic. But deaths can be compared via the same metric. With a UK population of 67,200,000 in 2020 and 206,468 COVID-19 deaths, it can be suggested that one in every 325 people have died, some avoidably.

A study published in the Journal of Epidemiology and Community Health in October determined that there were 334,327 excess deaths due to austerity in England, Scotland, and Wales between 2012 and 2019 (the data for 2010 to 2012 is unknown). This means, at a minimum, the death of one in every 201 people.

If austerity is – as many economists believe – a weapon of class warfare, its battlefield is scattered with the dead. Yet its stated aims were never achieved. If it is reintroduced by Rishi Sunak – if indeed it ever went away – it will cause further poverty and kill more people.

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