tag:theconversation.com,2011:/us/topics/austerity-2893/articlesAusterity – The Conversation2024-03-05T03:54:45Ztag:theconversation.com,2011:article/2244162024-03-05T03:54:45Z2024-03-05T03:54:45ZHow Birmingham city council’s ‘equal pay’ bankruptcy provided cover for ongoing Oracle IT disaster<figure><img src="https://images.theconversation.com/files/578244/original/file-20240227-18-lz49of.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Birmingham city.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/birmingham-uk-may-24-2022-aerial-2160648401">Clare Louise Jackson|Shutterstock</a></span></figcaption></figure><p>Birmingham city council is set to vote through a raft of budget cuts amounting to £149 million. Along with £500 million of asset sales, this amounts to what my colleagues and I, at the <a href="https://auditreformlab.group.shef.ac.uk/">Audit Reform Lab</a>, think will be <a href="https://www.localgov.co.uk/The-financial-crisis-in-Birmingham-City-Council/58912">the biggest cuts</a> any <a href="https://theconversation.com/one-in-five-councils-at-risk-of-bankruptcy-what-happens-after-local-authorities-run-out-of-money-222541">local authority</a> has ever made.</p>
<p>The <a href="https://www.birminghammail.co.uk/news/midlands-news/birminghams-vulnerable-kids-families-face-28552371">proposals</a> will devastate crucial statutory services, including children’s services, home-school transport, early help and adult social care. They will also include a 21% rise in council tax over the next two years and a near complete defunding of the arts.</p>
<p>A local authority cannot technically declare bankruptcy. But it can issue a section 114 notice when it is unable to balance its budget. </p>
<p>Birmingham did so, twice, in <a href="https://theconversation.com/birminghams-bankruptcy-is-only-the-tip-of-the-iceberg-local-authorities-across-england-are-at-risk-212912">September 2023</a>, citing “the cost of providing for equal pay claims”, which was revealed in September as being around £700 million (<a href="https://birmingham.cmis.uk.com/Birmingham/Document.ashx?czJKcaeAi5tUFL1DTL2UE4zNRBcoShgo=mpGoPXdMuDIyM5V%2fR7jZ9sRXc06X0GNchfxbMcLx9Btlp5WJqWbTqQ%3d%3d&rUzwRPf%2bZ3zd4E7Ikn8Lyw%3d%3d=pwRE6AGJFLDNlh225F5QMaQWCtPHwdhUfCZ%2fLUQzgA2uL5jNRG4jdQ%3d%3d&mCTIbCubSFfXsDGW9IXnlg%3d%3d=jUgQCaU3L68%3d&kCx1AnS9%2fpWZQ40DXFvdEw%3d%3d=T19Fn%2bcfuD0%3d&uJovDxwdjMPoYv%2bAJvYtyA%3d%3d=ctNJFf55vVA%3d&FgPlIEJYlotS%2bYGoBi5olA%3d%3d=NHdURQburHA%3d&d9Qjj0ag1Pd993jsyOJqFvmyB7X0CSQK=ctNJFf55vVA%3d&WGewmoAfeNR9xqBux0r1Q8Za60lavYmz=ctNJFf55vVA%3d&WGewmoAfeNQ16B2MHuCpMRKZMwaG1PaO=ctNJFf55vVA%3d">between £650 million and £760 million</a>). This new liability <a href="https://auditreformlab.group.shef.ac.uk/financial-crisis-in-birmingham-city-council/">left the council</a> in a negative “usable reserves” position – meaning it would not have the long-term funds to cover its costs.</p>
<p>We have conducted extensive documentary analysis of cabinet and audit committee papers, financial plans, annual reports and other key documents from the past two years. We have also observed public meetings since the section 114 notice. Our investigations show that the initial announcement did not tell the full story.</p>
<p>We have found that the spiralling budget deficits cited in the section 114 notice have little to do with the equal pay issue. Instead, they are the result of a disastrous implementation of a new Oracle IT system, which is compounding a decade of austerity cuts that had already left services severely overstretched. </p>
<p>Our findings suggest that the council must have known this IT disaster would have triggered a section 114 notice, but it issued the notice on equal pay claims grounds instead. This raises the important question of why.</p>
<p>What’s more, the council was told there was no reliable financial basis for the amounts of cuts being proposed. The council’s IT problems have meant it has not been able to monitor its budget effectively.</p>
<p>Birmingham city council told The Conversation that there has been extensive discussion in the public domain about the IT issue and that the council leader has spoken of the need for a public inquiry.</p>
<figure class="align-center ">
<img alt="A public square under a grey sky." src="https://images.theconversation.com/files/578241/original/file-20240227-16-73bzhc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/578241/original/file-20240227-16-73bzhc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=430&fit=crop&dpr=1 600w, https://images.theconversation.com/files/578241/original/file-20240227-16-73bzhc.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=430&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/578241/original/file-20240227-16-73bzhc.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=430&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/578241/original/file-20240227-16-73bzhc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=540&fit=crop&dpr=1 754w, https://images.theconversation.com/files/578241/original/file-20240227-16-73bzhc.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=540&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/578241/original/file-20240227-16-73bzhc.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=540&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Birmingham’s Cetenary Square with the Hall of Memory and the city library.</span>
<span class="attribution"><a class="source" href="https://unsplash.com/photos/white-concrete-building-under-white-clouds-during-daytime-Yp71DMkUAN8">Brian Lewicki|Unsplash</a></span>
</figcaption>
</figure>
<h2>Budget overspend</h2>
<p>Since September, the <a href="https://www.bbc.co.uk/news/uk-england-birmingham-66756555">£700 million equal pay liability</a> has been repeatedly cited, by the council and pundits alike, as the reason for the section 114 notice being issued. </p>
<p>The first point in <a href="https://www.birmingham.gov.uk/downloads/file/27684/section_114_notice">the notice</a> does cite advice from the external auditors, Grant Thornton, on equal pay. However, we have since confirmed that they were not in fact provided with the equal pay calculations until late November 2023. </p>
<p>According to <a href="https://birmingham.cmis.uk.com/Birmingham/Document.ashx?czJKcaeAi5tUFL1DTL2UE4zNRBcoShgo=y2IImvQ%2frWoxH3eHBGDoaOURoSVIORJGBK18xZvPyYMV4myW5daBVA%3d%3d&rUzwRPf%2bZ3zd4E7Ikn8Lyw%3d%3d=pwRE6AGJFLDNlh225F5QMaQWCtPHwdhUfCZ%2fLUQzgA2uL5jNRG4jdQ%3d%3d&mCTIbCubSFfXsDGW9IXnlg%3d%3d=hFflUdN3100%3d&kCx1AnS9%2fpWZQ40DXFvdEw%3d%3d=hFflUdN3100%3d&uJovDxwdjMPoYv%2bAJvYtyA%3d%3d=ctNJFf55vVA%3d&FgPlIEJYlotS%2bYGoBi5olA%3d%3d=NHdURQburHA%3d&d9Qjj0ag1Pd993jsyOJqFvmyB7X0CSQK=ctNJFf55vVA%3d&WGewmoAfeNR9xqBux0r1Q8Za60lavYmz=ctNJFf55vVA%3d&WGewmoAfeNQ16B2MHuCpMRKZMwaG1PaO=ctNJFf55vVA%3d">the agenda</a> for the February 21 2024 <a href="https://birmingham.public-i.tv/core/portal/webcast_interactive/847211">audit committee meeting</a>, the auditors have still not been able to sign off on the amount of the liability five months on from the section 114 notice.</p>
<p>Meanwhile, <a href="https://birmingham.cmis.uk.com/Birmingham/Document.ashx?czJKcaeAi5tUFL1DTL2UE4zNRBcoShgo=mkrbNm5PM2UY8SRQs%2bOH04inSk7pXN6%2b5IibKKiD%2fxSXvnlsqlifcQ%3d%3d&rUzwRPf%2bZ3zd4E7Ikn8Lyw%3d%3d=pwRE6AGJFLDNlh225F5QMaQWCtPHwdhUfCZ%2fLUQzgA2uL5jNRG4jdQ%3d%3d&mCTIbCubSFfXsDGW9IXnlg%3d%3d=hFflUdN3100%3d&kCx1AnS9%2fpWZQ40DXFvdEw%3d%3d=hFflUdN3100%3d&uJovDxwdjMPoYv%2bAJvYtyA%3d%3d=ctNJFf55vVA%3d&FgPlIEJYlotS%2bYGoBi5olA%3d%3d=NHdURQburHA%3d&d9Qjj0ag1Pd993jsyOJqFvmyB7X0CSQK=ctNJFf55vVA%3d&WGewmoAfeNR9xqBux0r1Q8Za60lavYmz=ctNJFf55vVA%3d&WGewmoAfeNQ16B2MHuCpMRKZMwaG1PaO=ctNJFf55vVA%3d">cabinet papers</a> from February 27 2024 show that <a href="https://birmingham.cmis.uk.com/Birmingham/Document.ashx?czJKcaeAi5tUFL1DTL2UE4zNRBcoShgo=mpGoPXdMuDIyM5V%2fR7jZ9sRXc06X0GNchfxbMcLx9Btlp5WJqWbTqQ%3d%3d&rUzwRPf%2bZ3zd4E7Ikn8Lyw%3d%3d=pwRE6AGJFLDNlh225F5QMaQWCtPHwdhUfCZ%2fLUQzgA2uL5jNRG4jdQ%3d%3d&mCTIbCubSFfXsDGW9IXnlg%3d%3d=jUgQCaU3L68%3d&kCx1AnS9%2fpWZQ40DXFvdEw%3d%3d=T19Fn%2bcfuD0%3d&uJovDxwdjMPoYv%2bAJvYtyA%3d%3d=ctNJFf55vVA%3d&FgPlIEJYlotS%2bYGoBi5olA%3d%3d=NHdURQburHA%3d&d9Qjj0ag1Pd993jsyOJqFvmyB7X0CSQK=ctNJFf55vVA%3d&WGewmoAfeNR9xqBux0r1Q8Za60lavYmz=ctNJFf55vVA%3d&WGewmoAfeNQ16B2MHuCpMRKZMwaG1PaO=ctNJFf55vVA%3d">the majority of the claims</a> are unlikely to be settled until after April 2025. In other words, much of the liability relates to possible future claims, rather than current obligations. </p>
<p>None of the in-year deficit cited in the section 114 notice relates to the settlement of new equal pay claims. And none of the £149 million of cuts to services relate to any deficit created by equal pay settlements. </p>
<p>Instead, the council’s spiralling deficit, estimated at more than £300 million, appears to relate to the disastrous launch of the Oracle IT system that went live in April 2022. Originally budgeted at £40 million, the <a href="https://birmingham.cmis.uk.com/Birmingham/Document.ashx?czJKcaeAi5tUFL1DTL2UE4zNRBcoShgo=57dLUgfYSn9F3fq69m9feOX2LbWPY8wqfbWgNIO0bsW241KaeDVjnw%3d%3d&rUzwRPf%2bZ3zd4E7Ikn8Lyw%3d%3d=pwRE6AGJFLDNlh225F5QMaQWCtPHwdhUfCZ%2fLUQzgA2uL5jNRG4jdQ%3d%3d&mCTIbCubSFfXsDGW9IXnlg%3d%3d=jUgQCaU3L68%3d&kCx1AnS9%2fpWZQ40DXFvdEw%3d%3d=T19Fn%2bcfuD0%3d&uJovDxwdjMPoYv%2bAJvYtyA%3d%3d=ctNJFf55vVA%3d&FgPlIEJYlotS%2bYGoBi5olA%3d%3d=NHdURQburHA%3d&d9Qjj0ag1Pd993jsyOJqFvmyB7X0CSQK=ctNJFf55vVA%3d&WGewmoAfeNR9xqBux0r1Q8Za60lavYmz=ctNJFf55vVA%3d&WGewmoAfeNQ16B2MHuCpMRKZMwaG1PaO=ctNJFf55vVA%3d">latest report</a> by the head of financial planning to the cabinet on February 27 2024 showed that the Oracle finance and human resources system has now run to an astonishing £131 million. </p>
<p>On top of this £91 million overspend, a further <a href="https://birmingham.cmis.uk.com/Birmingham/Document.ashx?czJKcaeAi5tUFL1DTL2UE4zNRBcoShgo=57dLUgfYSn9F3fq69m9feOX2LbWPY8wqfbWgNIO0bsW241KaeDVjnw%3d%3d&rUzwRPf%2bZ3zd4E7Ikn8Lyw%3d%3d=pwRE6AGJFLDNlh225F5QMaQWCtPHwdhUfCZ%2fLUQzgA2uL5jNRG4jdQ%3d%3d&mCTIbCubSFfXsDGW9IXnlg%3d%3d=jUgQCaU3L68%3d&kCx1AnS9%2fpWZQ40DXFvdEw%3d%3d=T19Fn%2bcfuD0%3d&uJovDxwdjMPoYv%2bAJvYtyA%3d%3d=ctNJFf55vVA%3d&FgPlIEJYlotS%2bYGoBi5olA%3d%3d=NHdURQburHA%3d&d9Qjj0ag1Pd993jsyOJqFvmyB7X0CSQK=ctNJFf55vVA%3d&WGewmoAfeNR9xqBux0r1Q8Za60lavYmz=ctNJFf55vVA%3d&WGewmoAfeNQ16B2MHuCpMRKZMwaG1PaO=ctNJFf55vVA%3d">£69 million</a> of savings in 2023-24 had to be written off as planned efficiencies were not delivered. Our investigations, which have included speaking with sources in the council and reviewing cabinet and audit committee documents and council financial plans, suggest much of this was related to Oracle. </p>
<p>The savings delivery rate, for example, was 91% in the year before the Oracle programme was installed and was around 70% over the past five years. In 2023 that rate dropped to just 18%. </p>
<p>Many of the documents show the council was not able to monitor its budget effectively. An <a href="https://birmingham.cmis.uk.com/Birmingham/Document.ashx?czJKcaeAi5tUFL1DTL2UE4zNRBcoShgo=uRU%2bAbtJc8BOZqvhhqUuqJJV83oeoGtllQP4l2sqyi9JCnpQt3DWKw%3d%3d&rUzwRPf%2bZ3zd4E7Ikn8Lyw%3d%3d=pwRE6AGJFLDNlh225F5QMaQWCtPHwdhUfCZ%2fLUQzgA2uL5jNRG4jdQ%3d%3d&mCTIbCubSFfXsDGW9IXnlg%3d%3d=jUgQCaU3L68%3d&kCx1AnS9%2fpWZQ40DXFvdEw%3d%3d=T19Fn%2bcfuD0%3d&uJovDxwdjMPoYv%2bAJvYtyA%3d%3d=ctNJFf55vVA%3d&FgPlIEJYlotS%2bYGoBi5olA%3d%3d=NHdURQburHA%3d&d9Qjj0ag1Pd993jsyOJqFvmyB7X0CSQK=ctNJFf55vVA%3d&WGewmoAfeNR9xqBux0r1Q8Za60lavYmz=ctNJFf55vVA%3d&WGewmoAfeNQ16B2MHuCpMRKZMwaG1PaO=ctNJFf55vVA%3d">operational assessment</a> of Oracle by the auditors released in January 2024 showed that more than 70,000 transaction errors have left the council in chaos, unable to prepare basic financial information. Through the 2022-23 financial year, council tax and business rates were not being effectively collected.</p>
<p>The <a href="https://birmingham.cmis.uk.com/Birmingham/Document.ashx?czJKcaeAi5tUFL1DTL2UE4zNRBcoShgo=uRU%2bAbtJc8BOZqvhhqUuqJJV83oeoGtllQP4l2sqyi9JCnpQt3DWKw%3d%3d&rUzwRPf%2bZ3zd4E7Ikn8Lyw%3d%3d=pwRE6AGJFLDNlh225F5QMaQWCtPHwdhUfCZ%2fLUQzgA2uL5jNRG4jdQ%3d%3d&mCTIbCubSFfXsDGW9IXnlg%3d%3d=jUgQCaU3L68%3d&kCx1AnS9%2fpWZQ40DXFvdEw%3d%3d=T19Fn%2bcfuD0%3d&uJovDxwdjMPoYv%2bAJvYtyA%3d%3d=ctNJFf55vVA%3d&FgPlIEJYlotS%2bYGoBi5olA%3d%3d=NHdURQburHA%3d&d9Qjj0ag1Pd993jsyOJqFvmyB7X0CSQK=ctNJFf55vVA%3d&WGewmoAfeNR9xqBux0r1Q8Za60lavYmz=ctNJFf55vVA%3d&WGewmoAfeNQ16B2MHuCpMRKZMwaG1PaO=ctNJFf55vVA%3d">auditors stated</a> on January 31 2024 that: “No budget monitoring reports have been provided to Directorates during 2022-23 or 2023-24”. On February 27 2024 the chief financial officer, meanwhile, <a href="https://birmingham.cmis.uk.com/Birmingham/Document.ashx?czJKcaeAi5tUFL1DTL2UE4zNRBcoShgo=th2B2HbpMmFdOSZVwXgjxdNIcFGGOmU1c4tJlx%2bjKUk393Wnm7M2yQ%3d%3d&rUzwRPf%2bZ3zd4E7Ikn8Lyw%3d%3d=pwRE6AGJFLDNlh225F5QMaQWCtPHwdhUfCZ%2fLUQzgA2uL5jNRG4jdQ%3d%3d&mCTIbCubSFfXsDGW9IXnlg%3d%3d=jUgQCaU3L68%3d&kCx1AnS9%2fpWZQ40DXFvdEw%3d%3d=T19Fn%2bcfuD0%3d&uJovDxwdjMPoYv%2bAJvYtyA%3d%3d=ctNJFf55vVA%3d&FgPlIEJYlotS%2bYGoBi5olA%3d%3d=NHdURQburHA%3d&d9Qjj0ag1Pd993jsyOJqFvmyB7X0CSQK=ctNJFf55vVA%3d&WGewmoAfeNR9xqBux0r1Q8Za60lavYmz=ctNJFf55vVA%3d&WGewmoAfeNQ16B2MHuCpMRKZMwaG1PaO=ctNJFf55vVA%3d">said</a>: “Reliance could not be placed on the most basic of financial information from the system, with Directorates unable to receive monitoring reports which reflected the true in-year financial position.”</p>
<h2>Political and financial consequences</h2>
<p>We have reviewed the <a href="https://www.localgov.co.uk/The-financial-crisis-in-Birmingham-City-Council/58912">exceptional financial support package</a> provided by the Department for Levelling Up, Housing and Communities. It now seems clear that by July 2023, senior executives in the council should have been aware that the Oracle disaster was set to trigger a section 114 notice. </p>
<p>We can confirm that if the council had waited for the audit of the equal pay liability to be completed, it would have in any case needed to issue a section 114 in relation to a £400 million hole in usable reserves and a projected £240 million “budget gap”. </p>
<p>These figures are over and above the £149 million of cuts the council has now identified. This means that, even if we set aside the equal pay issue, it would not have been a position to set a lawful budget. </p>
<p>This suggests that the council may have effectively jumped before it was pushed.</p>
<p>This has two important consequences. The first is political. Placing the blame on a headline-grabbing equal pay liability puts the problem at the door of the city’s trade unions and the elected Labour party leadership.</p>
<p>By contrast, accepting the section 114 notice on the basis of a failed Oracle implementation – much of which appears to have been withheld from elected members and the council’s audit committee – would have put the blame squarely at the door of the council’s senior executive team. Documents and webcasts of council committees through 2022-23 seem to show senior staff playing down the Oracle issue, with any concerns being “batted away” according to one audit committee member.</p>
<p>The second is financial. Accepting a section 114 notice on the back of the failed Oracle implementation would have fundamentally undermined the current programme of cuts. This is because, as both Grant Thornton <a href="https://birmingham.cmis.uk.com/Birmingham/Document.ashx?czJKcaeAi5tUFL1DTL2UE4zNRBcoShgo=uRU%2bAbtJc8BOZqvhhqUuqJJV83oeoGtllQP4l2sqyi9JCnpQt3DWKw%3d%3d&rUzwRPf%2bZ3zd4E7Ikn8Lyw%3d%3d=pwRE6AGJFLDNlh225F5QMaQWCtPHwdhUfCZ%2fLUQzgA2uL5jNRG4jdQ%3d%3d&mCTIbCubSFfXsDGW9IXnlg%3d%3d=jUgQCaU3L68%3d&kCx1AnS9%2fpWZQ40DXFvdEw%3d%3d=T19Fn%2bcfuD0%3d&uJovDxwdjMPoYv%2bAJvYtyA%3d%3d=ctNJFf55vVA%3d&FgPlIEJYlotS%2bYGoBi5olA%3d%3d=NHdURQburHA%3d&d9Qjj0ag1Pd993jsyOJqFvmyB7X0CSQK=ctNJFf55vVA%3d&WGewmoAfeNR9xqBux0r1Q8Za60lavYmz=ctNJFf55vVA%3d&WGewmoAfeNQ16B2MHuCpMRKZMwaG1PaO=ctNJFf55vVA%3d">pointed out</a> to the January 2024 audit committee, and the chief financial officer <a href="https://birmingham.cmis.uk.com/Birmingham/Document.ashx?czJKcaeAi5tUFL1DTL2UE4zNRBcoShgo=th2B2HbpMmFdOSZVwXgjxdNIcFGGOmU1c4tJlx%2bjKUk393Wnm7M2yQ%3d%3d&rUzwRPf%2bZ3zd4E7Ikn8Lyw%3d%3d=pwRE6AGJFLDNlh225F5QMaQWCtPHwdhUfCZ%2fLUQzgA2uL5jNRG4jdQ%3d%3d&mCTIbCubSFfXsDGW9IXnlg%3d%3d=jUgQCaU3L68%3d&kCx1AnS9%2fpWZQ40DXFvdEw%3d%3d=T19Fn%2bcfuD0%3d&uJovDxwdjMPoYv%2bAJvYtyA%3d%3d=ctNJFf55vVA%3d&FgPlIEJYlotS%2bYGoBi5olA%3d%3d=NHdURQburHA%3d&d9Qjj0ag1Pd993jsyOJqFvmyB7X0CSQK=ctNJFf55vVA%3d&WGewmoAfeNR9xqBux0r1Q8Za60lavYmz=ctNJFf55vVA%3d&WGewmoAfeNQ16B2MHuCpMRKZMwaG1PaO=ctNJFf55vVA%3d">repeated</a> in February 27 2024 cabinet papers, there is no reliable financial basis for the sums proposed.</p>
<p>To quote the external auditor’s <a href="https://birmingham.cmis.uk.com/Birmingham/Document.ashx?czJKcaeAi5tUFL1DTL2UE4zNRBcoShgo=uRU%2bAbtJc8BOZqvhhqUuqJJV83oeoGtllQP4l2sqyi9JCnpQt3DWKw%3d%3d&rUzwRPf%2bZ3zd4E7Ikn8Lyw%3d%3d=pwRE6AGJFLDNlh225F5QMaQWCtPHwdhUfCZ%2fLUQzgA2uL5jNRG4jdQ%3d%3d&mCTIbCubSFfXsDGW9IXnlg%3d%3d=jUgQCaU3L68%3d&kCx1AnS9%2fpWZQ40DXFvdEw%3d%3d=T19Fn%2bcfuD0%3d&uJovDxwdjMPoYv%2bAJvYtyA%3d%3d=ctNJFf55vVA%3d&FgPlIEJYlotS%2bYGoBi5olA%3d%3d=NHdURQburHA%3d&d9Qjj0ag1Pd993jsyOJqFvmyB7X0CSQK=ctNJFf55vVA%3d&WGewmoAfeNR9xqBux0r1Q8Za60lavYmz=ctNJFf55vVA%3d&WGewmoAfeNQ16B2MHuCpMRKZMwaG1PaO=ctNJFf55vVA%3d">January report</a> to the audit committee: “The council is several months from having an auditable set of accounts for 2022-23. There is no reliable forecast outturn for 2023-24, or a reliable baseline cost position against which to set the 2024-25 budget.”</p>
<p>The “revenue outturn report” sets out the actual expenditure for the year. Not having this for either 2022-23 or 2023-24 means the council does not have crucial accounting information on its financial position. </p>
<p>It has also not conducted any meaningful public consultation on the cuts, nor had any independent assurance over their financial sustainability or value for money.</p>
<p><a href="https://auditreformlab.group.shef.ac.uk/accountability-crisis-at-bcc/">Our research shows</a> that these new proposed cuts could cause a cost spiral due to mounting pressures on statutory services and serious business continuity risks. It could send the council over a <a href="https://auditreformlab.group.shef.ac.uk/accountability-crisis-at-bcc/">financial cliff edge</a>.</p>
<p>It is very possible that if Birmingham city council had waited to issue a section 114 notice linked to Oracle, this would have forced central government to underwrite the council’s position until its financial position could be properly assessed. It may have delayed much of the pain until 2025-2026, by which point a new, nationwide funding settlement for local government would have been a real possibility.</p>
<p>With councils like Birmingham facing a steep rise in cost pressures, and an existing <a href="https://committees.parliament.uk/committee/17/levelling-up-housing-and-communities-committee/news/199671/government-must-tackle-4bn-council-funding-gap-or-risk-severe-impact-to-services-and-council-finances-say-mps/">£4 billion funding gap across the sector</a>, a new funding settlement for local government will be an urgent priority for any incoming government following the general election later this year.</p>
<p><em>In response to the points made in this article, Birmingham city council said: “The implementation of Oracle has been the subject of extensive discussion in the public domain.” It also highlighted that in the cabinet meeting on February 27 2024, “the council leader spoke of the need for a public inquiry into the matter.”</em></p>
<p><em>Oracle has been approached for comment.</em></p><img src="https://counter.theconversation.com/content/224416/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>James Brackley does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Birmingham’s spiralling budget deficits are the result of a decade of austerity and a disastrous implementation of a new Oracle IT system.James Brackley, Lecturer in Accounting, University of SheffieldLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2147232023-10-17T17:55:52Z2023-10-17T17:55:52ZNZ election 2023: Labour out, National in – either way, neoliberalism wins again<p>For an election ostensibly fought over a “cost-of-living crisis”, there was a strong unspoken consensus between the two major parties: most people’s living standards needed to reduce to thwart inflation. Regardless of the election result, a form of austerity was always going to win.</p>
<p>Both National and Labour essentially agreed with the Reserve Bank hiking interest rates to bring down inflation – a crude market discipline likely to <a href="https://www.stuff.co.nz/business/money/300849075/ocr-hike-do-74000-people-really-have-to-lose-their-jobs-to-save-economy">cause redundancies</a>, suppress wages, and increase debt and inequality. </p>
<p>Such policies – classically <a href="https://www.investopedia.com/terms/n/neoliberalism.asp">neoliberal</a>, specifically <a href="https://www.investopedia.com/terms/m/monetarism.asp">monetarist</a> – are presented as if there is no alternative. Yet other countries have successfully used <a href="https://www.theguardian.com/commentisfree/2023/aug/03/spain-inflation-lower-bank-england-interest-rates">other measures</a> to protect living standards, including wealth taxes, rent caps, windfall taxes on excessive profits, and major subsidies on energy payments.</p>
<p>While National and Labour both offered targeted support for those struggling to get by, such as tax cuts (National) or the removal of GST from fruit and vegetables (Labour), such mitigation seems paltry by comparison. </p>
<p>Only smaller parties, notably the Greens and Te Pāti Māori, offered policies aimed at changing fundamental economic settings.</p>
<h2>Radical incrementalism?</h2>
<p>Of course, there were and are important differences between Labour and National. Many contend Labour has abandoned the free-market fundamentalism associated with “<a href="https://nzhistory.govt.nz/culture/the-1980s/overview">Rogernomics</a>” that it adopted in the 1980s.</p>
<p>Under the Labour governments led by Jacinda Ardern and then Chris Hipkins, there was an attempt to ameliorate the worst excesses of market capitalism. </p>
<p>Hipkins, for instance, insisted Labour’s policies were not simply about “tinkering around the edges of the neoliberal model”. He spoke of “<a href="https://www.wgtn.ac.nz/igps/commentaries/1741419-jacinda-ardern-transforms-new-zealand">radical incrementalism</a>” – allowing a government to “do big change”.</p>
<p>In that light, the 2017-23 Labour government lifted the minimum wage, introduced fair pay agreements, built state houses, increased <a href="https://www.ird.govt.nz/working-for-families">Working for Families</a> wage subsidies, and intervened during a pandemic and natural disasters to support people and jobs. </p>
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Read more:
<a href="https://theconversation.com/from-a-red-tide-in-2020-to-blood-on-the-floor-in-2023-nz-slams-the-door-on-labour-215430">From a red tide in 2020 to blood on the floor in 2023 – NZ slams the door on Labour</a>
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<p>Labour also reformed the Reserve Bank’s targets to include “<a href="https://www.rbnz.govt.nz/monetary-policy/about-monetary-policy/maximum-sustainable-employment">maximum sustainable employment</a>”, alongside the bank’s traditional goal of keeping inflation within a 1–3% band.</p>
<p>Beyond Aotearoa New Zealand, neoliberalism’s demise was proclaimed in the aftermath of the 2007-09 global financial crisis, as governments everywhere shored up the financial sector. </p>
<p>The obituaries have increased since the COVID pandemic. In the United States, Joe Biden’s preference for public investment prompted <a href="https://nymag.com/intelligencer/2023/05/biden-just-declared-the-death-of-neoliberalism.html">one commentator to claim</a> the president had “declared the death of neoliberalism”.</p>
<h2>The ‘third way’</h2>
<p>Given the Labour government’s track record, then, it might seem unfair to label it a neoliberal administration. But I think such reasoning is mistaken on several counts. </p>
<p>A rough scholarly consensus has emerged that neoliberalism has shown a <a href="https://onlinelibrary.wiley.com/doi/10.1111/j.1471-0374.2009.00277.x">remarkable ability to evolve</a>. Labour – and to some extent National – have rejected the harsh “vanguard neoliberalism” of the 1980s and ‘90s. Instead, they have embraced the mild neoliberalism of “<a href="https://www.worldcat.org/title/prosperity-for-all-economic-social-and-political-change-in-new-zealand-since-1935/oclc/62616738">third way</a>” politics since 1999.</p>
<p>Sometimes called the “post-Washington consensus”, third way economics accepts the need for some government intervention in the market, something the more hardline “<a href="https://www.piie.com/blogs/realtime-economic-issues-watch/what-washington-consensus">Washington consensus</a>” of the late 1980s did not. </p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/its-national-on-the-night-as-new-zealand-turns-right-2023-election-results-at-a-glance-214560">It’s National on the night as New Zealand turns right: 2023 election results at a glance</a>
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<p>Yet under this softer form of neoliberalism, governments do not intervene to genuinely redistribute wealth. Instead, they act to <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/dech.12645">temporarily support business</a> during crises.</p>
<p>For example, the Labour government’s COVID business support and wage subsidy scheme was supposedly undertaken to protect workers from unemployment. </p>
<p>In reality, it facilitated a massive upward transfer of wealth by subsidising businesses, and boosting house prices and private savings. That wealth transfer amounted to about NZ$1 trillion, <a href="https://www.1news.co.nz/2021/12/13/wealthy-nearly-1-trillion-richer-since-covid-began-hickey/">according to economic commentator</a> Bernard Hickey.</p>
<p>Hickey <a href="https://thekaka.substack.com/p/when-a-5-fee-costs-us-all-265-billion#details">also argued</a> governments of both stripes have effectively cut social services such as housing, health and education in real per-capita terms, as the population has increased. For the most part, increased funding has not stayed level with inflation.</p>
<p>We might call this austerity by stealth, with one example being the <a href="https://www.newsroom.co.nz/ideasroom/the-crisis-in-tertiary-education-caused-by-inadequate-funding">current funding crisis</a> in tertiary education that has resulted in many job cuts.</p>
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<strong>
Read more:
<a href="https://theconversation.com/with-act-and-nz-first-promising-to-overhaul-pharmac-whats-in-store-for-publicly-funded-medicines-215060">With ACT and NZ First promising to overhaul Pharmac, what’s in store for publicly funded medicines?</a>
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<h2>Intervention <em>for</em> the market</h2>
<p>In this sense, the various palliative reforms made by the Ardern-Hipkins governments do not represent a fundamental swing away from neoliberalism. Crucially, both prime ministers ruled out any kind of wealth or capital gains tax, and generally kept tax levels low (despite a small increase in the highest income tax rate). </p>
<p>Tellingly, the US Heritage Foundation – a think tank devoted to the “principles of free enterprise, limited government [and] individual freedom” – still <a href="https://www.heritage.org/index/country/newzealand">ranks New Zealand fifth</a> in its global “index of economic freedom”. </p>
<p>While Labour’s Reserve Bank reforms appeared to modify its monetary priorities to maximise sustainable employment, its <a href="https://www.stuff.co.nz/business/130568638/adrian-orr-admits-reserve-bank-is-deliberately-engineering-recession">governor admitted</a> raising interest rates to control inflation was deliberately engineering a recession, with a likely rise in unemployment.</p>
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<strong>
Read more:
<a href="https://theconversation.com/the-battle-for-nzs-farming-heartland-groundswell-act-and-the-changing-face-of-rural-politics-213979">The battle for NZ’s farming heartland: Groundswell, ACT and the changing face of rural politics</a>
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<p>Before becoming prime minister in 2017, <a href="https://www.stuff.co.nz/national/politics/96739673/jacinda-ardern-says-neoliberalism-has-failed">Ardern agreed</a> with the view of previous National prime minister Jim Bolger that neoliberalism had failed. She said Labour accepted the need for government intervention in the market.</p>
<p>This might qualify as a rejection of neoliberalism if we define it only as a set of ideas or policies designed to “hollow out the state” and promote free-market, individualistic competition.</p>
<p>But there is another view of neoliberalism, put forward by historian Quinn Slobodian and other scholars, that it was never about rejecting big government. Rather, at its core, it is about imposing a global and state framework that <a href="https://www.dissentmagazine.org/article/neoliberalism-world-order-review-quinn-slobodian-globalists/">favours business and private property</a>. </p>
<p>To achieve this, they argue, the state restricts democracy, trade unions and community interest groups from achieving genuine improvements in ordinary people’s lives. Slobodian sees neoliberalism as involving “re-regulation” rather than deregulation.</p>
<h2>The underlying consensus</h2>
<p>None of this means Labour and National mirror each other. Labour is more centrist, more committed to maintaining public services. National is more business-friendly and seems poised to make deeper cuts to public services. </p>
<p>To differing degrees, National and its probable coalition partner ACT reject the “progressive” aspects of what feminist scholar Nancy Fraser called “<a href="https://www.dissentmagazine.org/online_articles/progressive-neoliberalism-reactionary-populism-nancy-fraser/">progressive neoliberalism</a>”. They aim to roll back most of Labour’s incremental reforms, and are aligned in their opposition to what they see as excessive government spending and regulation.</p>
<p>But beneath those apparent ideological differences there remains an underlying neoliberal consensus. Roughly speaking, this compact aims to keep taxes low, push for free trade agreements, maintain a largely deregulated business sector, enable financial speculation, and use interest rates to combat inflation.</p>
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Read more:
<a href="https://theconversation.com/nzs-green-party-is-filling-the-void-on-the-left-as-voters-grow-frustrated-with-labours-centrist-shift-213061">NZ's Green Party is 'filling the void on the left' as voters grow frustrated with Labour's centrist shift</a>
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<p>Above all, the goal is to be “fiscally responsible” by keeping government spending tight and the debt-to-GDP ratio low. Austerity is the means by which this is achieved, whether by stealth or through more upfront cuts.</p>
<p>It was perhaps predictable that governments everywhere would revert to austerity to pay down debts incurred during the pandemic. But those same governments are also struggling with broader economic, climate, housing, health and education crises.</p>
<p>Wars and political polarisation generally have added to a sense that neoliberalism’s hegemony is fraying. There has been a trend towards more <a href="https://www.gu.se/en/news/the-world-is-becoming-increasingly-authoritarian-but-there-is-hope">nationalist and authoritarian</a> government – although not yet in Aotearoa New Zealand to any great extent.</p>
<p>Given we are now seeing living standards squeezed to combat inflation, and government austerity to pay off COVID debts, neoliberalism still seems embedded in the political and economic fabric of Aotearoa. This is especially so with the election success of parties promising to reduce government spending.</p><img src="https://counter.theconversation.com/content/214723/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Toby Boraman does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Beneath the obvious policy differences between Labour and National lies a tacit consensus on fundamental economic settings. Until that changes, political choice will be constrained.Toby Boraman, Lecturer in Politics, Massey UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2147472023-10-03T15:57:38Z2023-10-03T15:57:38ZEd Balls and George Osborne’s new podcast is essential listening – but not for the reasons they think<p>In an apparent attempt to “talk across the political divide”, former chancellor George Osborne and former shadow chancellor Ed Balls have launched a podcast. </p>
<p>Political Currency has been billed as a behind-the-scenes glimpse into the rooms and minds where the key decisions are made. But what is perhaps more evident from the opening episodes is not how politicians of different parties can communicate so much as how they can collude.</p>
<p>It hasn’t taken long for the two men to use the podcast to celebrate their joint achievements. This began with the current Labour party “sticking with the two-child limit on welfare, which I [Osborne] introduced.”</p>
<p>Balls’s response was telling: </p>
<blockquote>
<p>Well, that takes you to an interesting thing in British politics which is that in the end, however contested things are, the only things that last are the things that become consensual. So, the Conservatives opposed the minimum wage in 1997, you [Osborne] ended up boasting about raising it. The Conservatives opposed Central Bank independence in 97/98, you ended up being a champion of it. The trade union reforms of the 1980s, which many Labour People hated at the time – clearly Tony Blair and Gordon Brown carried on with them. So, things which are contested can become consensual and when people agree, that is often how our county moves forward.</p>
</blockquote>
<p>Issues on which Balls and Osborne appear to happily agree have so far included setting a very low minimum wage for huge numbers of workers and greatly curtailing the ability of trade unions to protest and organise.</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1701130927118622879"}"></div></p>
<p>Those of us who listened on learnt how cross-party consensus was achieved in Westminster on the policy to restrict benefits so that parents can only claim support for <a href="https://theconversation.com/welcome-to-the-uk-land-of-the-two-child-policy-44756">two children</a> – not a third or any subsequent child. </p>
<p>This policy has been a <a href="https://cpag.org.uk/news-blogs/news-listings/official-statistics-reveal-1-10-children-hit-two-child-limit#:%7E:text=The%20policy%2C1%20which%20took,are%20affected%20by%20the%20limit.">key driver of child poverty</a> in England and Wales, where a majority of children who have two or more siblings <a href="https://www.dannydorling.org/books/shatterednation/slides_all_files/page5-1055-full.html">go hungry several times a month</a>. The policy does not apply in Scotland and Northern Ireland, which are now the two places in the UK where child poverty rates are <a href="https://endchildpoverty.org.uk/child-poverty/">lowest</a>. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/551438/original/file-20231002-27-j7ca92.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A chart showing the ups and down of child poverty figures over the years." src="https://images.theconversation.com/files/551438/original/file-20231002-27-j7ca92.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/551438/original/file-20231002-27-j7ca92.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=363&fit=crop&dpr=1 600w, https://images.theconversation.com/files/551438/original/file-20231002-27-j7ca92.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=363&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/551438/original/file-20231002-27-j7ca92.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=363&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/551438/original/file-20231002-27-j7ca92.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=456&fit=crop&dpr=1 754w, https://images.theconversation.com/files/551438/original/file-20231002-27-j7ca92.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=456&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/551438/original/file-20231002-27-j7ca92.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=456&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Child poverty, 2014-2022.</span>
<span class="attribution"><a class="source" href="https://endchildpoverty.org.uk/child-poverty/">End Child Poverty Coalition</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>And yet poverty itself has so far only been mentioned once on the podcast, around halfway through episode one. Even then, our hosts were talking about pensioner poverty – an issue that matters, they explained, because so many votes are involved. </p>
<p>In the same episode, Osborne <a href="https://podcasts.apple.com/gb/podcast/hs2-in-doubt-china-spies-and-the-triple-lock/id1706536336?i=1000627908059">revealed</a> how the New Labour and Conservative parties had colluded (or “worked together”, as he put it) to “see the state pension age go from 65, to 66, to 67, to 68”. He continued with another example of how key issues were agreed by both sides rather than being put to the electorate: </p>
<blockquote>
<p>I remember Peter Mandelson coming to me before the 2010 general election, he was the [Labour] deputy prime minister, and saying “we want to put up student fees, tuition fees, but we can’t do that before an election, its too difficult for Labour, why don’t we set up a report, and while you as Conservatives hopefully want to see the tuition fees go up so that the universities are better funded, why don’t you sign up to this commission and it can report after the election?”</p>
</blockquote>
<p>Balls agreed that this was the right way to go about things, that the two main political parties of the UK should agree policy between themselves, as the “grown-ups in the room” while ensuring that it appeared as if each election mattered.</p>
<p>The two men appear to agree on almost everything of any substance. Or if they don’t, they’ll work out their differences between themselves and tell us the result later.</p>
<h2>Listen to the ‘grown-ups’</h2>
<p>So far, Balls and Osborne have been in a celebratory mood in their discussions. They appear very happy with the current state of British politics and the people in charge. There is much bile disguised as banter. </p>
<p>Both have particular contempt for Boris Johnson, Ed Miliband and Jeremy Corbyn, with most of their anger directed at Miliband, who they linked, at length and unfairly, to Russell Brand. They both disagree with Brexit but accept it. For them, in 2023, the grown-ups are back in charge again – and that includes their gaining air time. </p>
<p>Listening to them, I’ve thought of how the austerity policies they speak about have led to deprivation in the UK on such a scale that many children no longer grow up properly, physically or mentally. How the <a href="https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(20)31859-6/fulltext">average height</a> of five-year-old boys in the UK has risen and fallen since 1990.</p>
<p><strong>Average height of five-year-old boys, 1990-2020:</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/551386/original/file-20231002-29-2m1yli.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A chart showing the average height of male children had been increasing after 1990 but then suddenly started to decline in 2010." src="https://images.theconversation.com/files/551386/original/file-20231002-29-2m1yli.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/551386/original/file-20231002-29-2m1yli.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=322&fit=crop&dpr=1 600w, https://images.theconversation.com/files/551386/original/file-20231002-29-2m1yli.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=322&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/551386/original/file-20231002-29-2m1yli.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=322&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/551386/original/file-20231002-29-2m1yli.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=405&fit=crop&dpr=1 754w, https://images.theconversation.com/files/551386/original/file-20231002-29-2m1yli.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=405&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/551386/original/file-20231002-29-2m1yli.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=405&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Average height of five-year-old boys.</span>
<span class="attribution"><span class="source">The Lancet/ITV</span>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>If Balls or Osborne have an explanation other than child deprivation for the above trends, it would be interesting to hear it. The most convincing explanation I have heard as to why we have tolerated such high inequality and poverty in the UK for so long was reportedly given at a <a href="https://conservativehome.blogs.com/centreright/2008/04/making-history.html">private dinner in Hampshire in 2002</a>, when Margaret Thatcher was asked what her greatest achievement had been. She replied: “Tony Blair and New Labour. We forced our opponents to change their minds.”</p>
<p>There is an older parallel to be drawn, too. In 1940, three journalists of three different political persuasions wrote a book together: <a href="https://www.oxforddnb.com/display/10.1093/ref:odnb/9780198614128.001.0001/odnb-9780198614128-e-70401">The Guilty Men</a>. They were Michael Foot, Peter Howard and Frank Owen and their targets were the British public figures who appeased 1930s Germany. </p>
<p>A similar book could be written today about the appeasers of market forces who promised that we could live with “tough decisions” under austerity and that children would not go hungry or grow up stunted.</p>
<p>But instead we have the two-men-talking-to-each-other podcast format. In every episode, Balls and Osborne happily outline the thinking behind their actions – the actions that just a few in my generation, given the best starts in life, have taken and have caused such harm to others. </p>
<p>I am grateful to them for using their show to put so much on the record about their time in charge, years before their cabinet papers and other secret documents will be <a href="https://www.nationalarchives.gov.uk/about/our-role/transparency/20-year-rule/">released to the public</a>.</p><img src="https://counter.theconversation.com/content/214747/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Danny Dorling does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The former chancellor and shadow chancellor have revealed how their parties collaborated on devising some of the most damaging policies of the past 20 years.Danny Dorling, Halford Mackinder Professor of Geography, University of OxfordLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2129122023-09-06T14:07:42Z2023-09-06T14:07:42ZBirmingham’s bankruptcy is only the tip of the iceberg – local authorities across England are at risk<p>The city of Birmingham has <a href="https://www.theguardian.com/society/2023/sep/05/birmingham-city-council-financial-distress-budget-section-114">issued</a> what is known as a <a href="https://www.publicfinance.co.uk/news/2023/09/birmingham-issues-s114-notice">section 114 notice</a>. This signals that the council is unable to balance its budget, due to lack of financial resources. </p>
<p>That the largest local authority in Europe and the second largest city in the UK should effectively declare itself bankrupt should come as no surprise. More than a decade of austerity in English local government has squeezed local councils to their utter financial limits. </p>
<p><a href="https://www.gov.uk/government/collections/final-local-government-finance-settlement-england-2023-to-2024">Government grants</a> are expected to total £61.7 billion in 2023-24. That represents a £1.9 billion (3.2%) increase in real terms over 2022-23 budget data. </p>
<p>However, this recent reversal in local government funding is not enough to offset the <a href="https://www.instituteforgovernment.org.uk/explainer/local-government-funding-england">decade-long cuts</a> to government funding. In July 2023, the <a href="https://obr.uk/frs/fiscal-risks-and-sustainability-july-2023/">Office for Budget Responsibility</a> flagged local borrowing as “at risk”. And the National Audit Office has predicted that <a href="https://www.nao.org.uk/reports/financial-sustainability-of-local-authorities-visualisation-update/">more is to come</a>. Due to the cost-of-living crisis, the rising need for social care and the continued impact of the pandemic, there is less money and ever greater <a href="https://www.publicfinance.co.uk/news/2023/08/huge-costs-are-stifling-councils-lga-warns?utm_term=&utm_medium=email&utm_source=Adestra">need</a>. </p>
<p>Our <a href="https://theconversation.com/what-happens-when-your-local-council-goes-bankrupt-185539">research</a> shows <a href="https://insol.azureedge.net/cmsstorage/insol/media/document-library/books/when-liquidation-is-not-an-option-a-global-study-on-the-treatment-of-local-public-entities-in-distress.pdf?utm_campaign=1259736_LPEs%20Book&utm_medium=email&utm_source=INSOL%20International&dm_i=4WAM,R00O,4HZCIK,3C0KS,1">how fragile</a> England’s local government funding system is. </p>
<p>Councils do have <a href="https://www.instituteforgovernment.org.uk/explainer/tax-and-devolution">limited revenue-raising powers</a> to finance current expenses. Despite this, local authorities across the country have long relied on their <a href="https://www.publicfinance.co.uk/news/2023/08/councils-face-tough-reserve-position-despite-overall-balances?utm_term=&utm_medium=email&utm_source=Adestra">reserves</a>, selling property assets, <a href="https://www.publicfinance.co.uk/news/2020/07/birmingham-tops-latest-round-council-covid-19-allocations">one-off grants</a>, high-risk <a href="https://www.publicfinance.co.uk/news/2023/09/bcp-auditors-raise-serious-concerns-over-financial-viability?utm_term=&utm_medium=email&utm_source=Adestra">investments</a> and cheap borrowing for “regeneration projects” simply to stay afloat.</p>
<h2>What happens when councils go bankrupt</h2>
<p>Local authorities in England cannot be legally liquidated. Instead, when all other remedies have proven ineffective, the chief financial officer issues a <a href="https://www.legislation.gov.uk/ukpga/1988/41/section/114">section 114 notice</a>. This bars all new expenditure for a period of 21 days, except for those that safeguard vulnerable people and statutory services. </p>
<p>Issuing this notice signals that the council is unable to bring under control its future expenditure. At the end of this prohibition period, leaders must then decide what to do. These measures generally include cuts to services, increases to local taxation and the sale of property and other assets.</p>
<p>If the external auditors agree with the turnaround plan, this is sent to the national government for approval, before being implemented by elected officials of the local authority or by independent commissioners appointed by the government. </p>
<p>When no agreement can be reached, the Department of Levelling Up, Housing and Communities intervenes. In 2021, <a href="https://www.gov.uk/government/news/government-acts-to-tackle-failure-of-croydon-council">Secretary of State Robert Jenrick</a> appointed a panel to take over from councillors in <a href="https://www.theguardian.com/society/2022/nov/22/croydon-council-declares-effective-bankruptcy-for-third-time-in-two-years">Croydon</a>, in order to ensure that the council would meet its “<a href="https://questions-statements.parliament.uk/written-statements/detail/2023-07-20/hcws985">best value duty</a>” as required by the Local Government Act of 1999. </p>
<p>Section 114 notices are the last resort. Until 2018, these were very rare – the last council to have issued one was the London Borough of Hackney in 2000. Since 2018, however, five councils have issued section 114s: <a href="https://www.northantslive.news/news/northamptonshire-news/two-years-after-northamptonshire-county-4209584">Northamptonshire</a>, Croydon (in <a href="https://www.theguardian.com/society/2020/nov/13/how-covid-19-pushed-croydon-over-the-edge-into-bankruptcy">2020</a> and <a href="https://www.theguardian.com/society/2022/nov/22/croydon-council-declares-effective-bankruptcy-for-third-time-in-two-years">2022</a>), <a href="https://www.slough.gov.uk/downloads/file/2040/slough-s114-notice-2-july-2021">Slough</a>, <a href="https://www.thurrock.gov.uk/sites/default/files/assets/documents/section114-notice.pdf">Thurrock</a> and <a href="https://www.publicfinance.co.uk/news/2023/06/woking-issues-section-114-notice">Woking</a>. <a href="https://www.coventry.gov.uk/news/article/4744/letter-to-secretary-of-state-for-levelling-up-housing-and-communities">Coventry</a> has warned it might have to follow suit. </p>
<p>Birmingham officials have cited a <a href="https://www.publicfinance.co.uk/news/2023/06/council-reveals-ps100m-cost-flawed-it-system-adoption">new IT system</a> (£100m) installed in 2022 and hosting the 2022 Commonwealth Games (£184m) as triggers for its current dilemma – costs that in themselves are not sufficient to justify the notice. More problematic is the <a href="https://www.publicfinance.co.uk/news/2023/06/birmingham-drastically-cut-spending-after-uncovering-ps760m-equal-pay-cost">£760 million debt</a> for which the council became liable in July 2023, when the bill of an equal-pay ruling by the UK Supreme Court, <a href="https://www.supremecourt.uk/cases/docs/uksc-2012-0008-judgment.pdf">dating back to 2012</a>, became clear. </p>
<p>In response to this new bill, <a href="https://www.bbc.com/news/articles/cd1wnxp9ny1o">Prime Minister</a> Rishi Sunak ruled out government aid to the city, saying it was “not the government’s job to bail out the council for its financial mismanagement”. However, the governance and accounting issues in Birmingham mirror those experienced by all the English authorities that have declared themselves bankrupt in the last five years.</p>
<h2>A flawed system</h2>
<p>Austerity has seen Birmingham suffer the consequences of debilitating cuts to its government <a href="https://www.birmingham.ac.uk/schools/business/research/research-projects/city-redi/wm-redi/theme-6/insights-into-birmingham-city-councils-revenue-funding-and-spending.aspx">funding</a>. Between 2010/11 and 2019/2020, the city’s total income fell by 17%, leading the council to find savings of £736 million. The need for local services, meanwhile, has spiralled, with the population increasing by 7.5%. </p>
<p>Tensions with council staff, in particular in relation to <a href="https://www.theguardian.com/uk-news/2017/jul/28/birmingham-refuse-collectors-strike-runs-into-second-month">waste collection</a>, led to an extended strike in 2017. Concerns over the council’s financial management subsequently saw the finance chief, Clive Heaphy, resign in 2020. </p>
<p>Yet, in 2021, the Chartered Institute of Public Finance and Accountancy <a href="https://www.birmingham.gov.uk/news/article/893/councils_financial_management_praised_in_new_cipfa_report">reported</a> that the city had made good progress. </p>
<p>Following the recent cases of Thurrock and Woking issuing section 114 notices, the Department for Levelling Up, Housing and Communities decided to launch an inquiry into the effectiveness of financial reporting and audit system in local authorities.</p>
<p>Recently, in May 2023, Birmingham’s council leader, Ian Ward, refused to resign, despite <a href="https://www.bbc.com/news/uk-england-birmingham-65614938">a leaked internal report</a> by the Labour party showing a general dysfunctional climate in the local authority. This led to an independent governance review. </p>
<p>Here too, Birmingham is not alone. It takes years for financial issues to become so serious as to justify the issue of a section 114 notice. Governance problems have been widely reported as the underlying cause for <a href="https://committees.parliament.uk/publications/6777/documents/72117/default/">Croydon</a> issuing, to date, <a href="https://www.instituteforgovernment.org.uk/comment/croydon-council-section-114">three section 114 notices</a>. </p>
<p>Local taxpayers have much to be worried about. Distressed local councils often have to increase local taxation to balance their books. To wit, Croydon’s record 14.99% <a href="https://news.croydon.gov.uk/croydon-sets-2023-24-budget/#:%7E:text=Full%20Council%20has%20approved%20a,expects%20all%20councils%20to%20levy.">increase</a> in council tax rates. </p>
<p>Vulnerable people too bear the brunt of this. Public services are reduced to the most essential ones. Local workers are dismissed through <a href="https://www.localgov.co.uk/Resignation-scheme-begins-in-Birmingham--/57827">voluntary</a> or <a href="https://www.bbc.com/news/uk-england-berkshire-61818756">mandatory</a> redundancy schemes. </p>
<p>And the impact is not limited to the local community. Taxpayers across the country end up contributing towards rescuing local authorities. </p>
<p>In May 2023, the cross-party levelling up, housing and communities parliamentary committee <a href="https://committees.parliament.uk/publications/40145/documents/195720/default/">criticised</a> the government’s competitive funding system. Councils have to bid for access to government funds, in a system which is fragmented and resource intensive. </p>
<p>In prioritising low-priority projects over long-term investment, the government’s <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1052708/Levelling_up_the_UK_white_paper.pdf">levelling-up agenda</a> is failing to comprehensively address the problems facing local authorities. </p>
<p>At least 26 more councils, including <a href="https://www.localgov.co.uk/Stoke-on-Trent-Council-at-risk-of-bankruptcy/57857">Stoke-on-Trent</a>, <a href="https://www.publicfinance.co.uk/news/2023/08/kent-curtail-non-essential-spending?utm_term=&utm_medium=email&utm_source=Adestra">Kent</a> and <a href="https://www.theguardian.com/society/2023/aug/09/yorkshire-council-warns-of-budget-crisis-as-deficit-reaches-47m">Kirklees</a>, are deemed at risk of bankruptcy in the next <a href="https://www.theguardian.com/society/2023/aug/28/at-least-26-english-councils-at-risk-of-bankruptcy-in-next-two-years">two years</a>. Without thorough local finance reform – and a government invested in protecting local government at the service of local people – more could fall. </p>
<p><em>This article was amended on September 7 2023 to correctly state that it discusses England’s local government funding system, and not the UK’s, as was previously stated.</em></p><img src="https://counter.theconversation.com/content/212912/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>More than a decade of austerity in English local government has squeezed councils to their utter financial limits.Yseult Marique, Professor, University of EssexEugenio Vaccari, Senior Lecturer, Royal Holloway University of LondonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2082402023-07-27T14:50:21Z2023-07-27T14:50:21ZHow austerity made the UK more vulnerable to COVID<figure><img src="https://images.theconversation.com/files/537062/original/file-20230712-23-i33wda.jpg?ixlib=rb-1.1.0&rect=7%2C0%2C5185%2C3737&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/lonely-depressed-senior-old-widow-woman-1762347944">SB Arts Media/Shutterstock</a></span></figcaption></figure><p>The concept of austerity <a href="https://www.bbc.co.uk/news/health-66223172">featured prominently</a> in the first round of hearings of the UK’s COVID inquiry, which has recently come to a close. Notably, former chancellor George Osborne claimed that austerity had a “<a href="https://www.independent.co.uk/news/uk/home-news/covid-inquiry-live-pandemic-david-cameron-b2360578.html">positive</a>” effect on the UK’s ability to withstand the pandemic.</p>
<p>Our reading of the evidence is that the austerity policies initiated after 2010 weakened the UK, allowing COVID to do more damage than it otherwise might have. </p>
<p>Osborne’s <a href="https://www.independent.co.uk/news/uk/home-news/covid-inquiry-live-pandemic-david-cameron-b2360578.html">claim</a> was based on the argument that, without austerity policies to “repair the UK’s public finances” following the economic recession of 2008 to 2009, “Britain would have been more exposed” to the pandemic. </p>
<p><a href="https://read.oecd-ilibrary.org/governance/the-abuse-and-misuse-of-the-term-austerity-implications-for-oecd-countries_budget-14-5jxrmdxc6sq1#page7">Austerity</a> measures seek to reduce government deficits, usually through a mix of public spending cuts and increased taxation. While there’s <a href="https://www.imf.org/external/pubs/ft/fandd/2016/06/ostry.htm">continued disagreement</a> about whether these measures really help the economy, the <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4952125/">evidence</a> is clear that austerity in the UK has been bad for health. </p>
<p>Osborne’s 2010 austerity <a href="https://researchbriefings.files.parliament.uk/documents/SN05605/SN05605.pdf">budget</a> cut billions from public and welfare spending. One recent analysis estimated that austerity policies pursued between 2010 and 2019 were associated with <a href="https://progressiveeconomyforum.com/publications/the-macroeconomics-of-austerity/">£540 billion less public spending</a>. </p>
<p><a href="https://bmjopen.bmj.com/content/11/10/e046417">Research</a> suggests that the “spending gap” attributed to austerity – reductions in health and social care expenditure – was 13.64% between 2010 and 2015, which may have led to <a href="https://www.bmj.com/company/newsroom/uk-austerity-since-2010-linked-to-tens-of-thousands-more-deaths-than-expected/">33,888 extra deaths</a> in the same period.</p>
<p>Austerity acts at <a href="https://academic.oup.com/eurpub/article/27/suppl_4/18/4430523">every point</a> on the pathways that lead to disease and premature death. Most obviously, austerity measures make people poorer. The poorer a person is the <a href="https://www.instituteofhealthequity.org/resources-reports/marmot-review-10-years-on/the-marmot-review-10-years-on-executive-summary.pdf">more likely they are</a> to suffer ill health and die younger.</p>
<p>Austerity measures can also make people’s lives more <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5335798/">precarious</a> in that they can no longer be confident that they will have income, employment, shelter or even food. </p>
<p>For example, cuts to welfare have been followed by large <a href="https://www.thelancet.com/journals/eclinm/article/PIIS2589-5370(21)00061-4/fulltext">increases in food bank use</a> over recent years. The <a href="https://www.statista.com/statistics/382695/uk-foodbank-users/">Trussell Trust</a> reports that the number of people receiving emergency food parcels from their food banks in the UK increased from roughly 25,000 in 2008-2009 to nearly 2 million in 2019-2020, and this number grew further by 2022-2023. </p>
<p>Food insecurity is associated with <a href="https://www.thelancet.com/journals/eclinm/article/PIIS2589-5370(21)00061-4/fulltext">poor physical health</a> and obesity, for example due to increased consumption of processed foods, which can be cheaper, or under-nutrition, through decreased access to healthy foods. </p>
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<strong>
Read more:
<a href="https://theconversation.com/covid-how-incorrect-assumptions-and-poor-foresight-hampered-the-uks-pandemic-preparedness-208720">COVID: how incorrect assumptions and poor foresight hampered the UK's pandemic preparedness</a>
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<p>The austerity policies pursued by Osborne and his successors also left the UK vulnerable to COVID in a number of specific ways.</p>
<p>We know groups that were <a href="https://library.oapen.org/handle/20.500.12657/51451">already disadvantaged</a> were hit hardest by the pandemic. They were more likely to get COVID and, if they became infected, to become severely ill and die. </p>
<p>The reasons are not difficult to discern. When a novel virus enters a population that has no previous immunity, its spread is determined, almost entirely, by the nature and intensity of interactions between people.</p>
<p>One of the ways austerity cuts harmed pandemic resilience was by <a href="https://www.tuc.org.uk/research-analysis/reports/austerity-and-pandemic#_ftn71">increasing overcrowding</a> in homes, which makes people <a href="https://eprints.ncl.ac.uk/file_store/production/287551/F763D433-9789-4FF3-8280-77AF28E3731F.pdf">more vulnerable</a> to COVID spread, and less able to self-isolate.</p>
<figure class="align-center ">
<img alt="Austerity protesters in London in March 2011." src="https://images.theconversation.com/files/537063/original/file-20230712-21-l3jrxr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/537063/original/file-20230712-21-l3jrxr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/537063/original/file-20230712-21-l3jrxr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/537063/original/file-20230712-21-l3jrxr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/537063/original/file-20230712-21-l3jrxr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/537063/original/file-20230712-21-l3jrxr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/537063/original/file-20230712-21-l3jrxr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Austerity measures have been controversial.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/london-march-26-austerity-protesters-on-113725144">1000 Words/Shutterstock</a></span>
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</figure>
<p>Even before the British government decided, belatedly, to lock down, those who could were already restricting their interactions with others. Many began working from home, becoming familiar with new ways of interacting with colleagues online. But for many others, this was <a href="https://post.parliament.uk/covid-19-and-the-digital-divide/">simply not possible</a>.</p>
<p>Some people, for example public service workers, had <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2615268">multiple part-time jobs</a>, with financial hardship linked to <a href="https://www.unison.org.uk/news/article/2014/12/public-service-workers-paying-the-price-of-austerity-says-unison/">austerity</a> and the <a href="https://www.peoplemanagement.co.uk/article/1809546/four-million-uk-workers-considering-second-job-combat-cost-living-survey-finds">cost of living crisis</a> contributing factors. </p>
<p>All of this created ideal conditions for the virus to spread within families and across places of employment, such as care homes.</p>
<p>These problems might have been ameliorated if strong welfare protections had been in place, but they weren’t. For almost a decade, governments had been chipping away at <a href="https://www.instituteforgovernment.org.uk/sites/default/files/publications/austerity-public-services.pdf">social support systems</a>, with people who were old or disabled especially hard hit. By the mid-2010s, life expectancy at older ages had <a href="https://academic.oup.com/bmb/article/133/1/4/5812717?login=false">begun declining</a>.</p>
<p>As a result of austerity measures, social care spending, which rose between 2001 and 2010, started <a href="https://www.bmj.com/company/newsroom/uk-austerity-since-2010-linked-to-tens-of-thousands-more-deaths-than-expected/">falling between 2010 and 2015</a> (taking inflation into account). This meant the resilience of the social care system was significantly weakened going into the pandemic.</p>
<p>Older people’s plight was exacerbated by the abysmal state of the housing stock, with the <a href="https://www.euronews.com/green/2022/12/09/europes-energy-crisis-in-data-which-countries-have-the-best-and-worst-insulated-homes">least efficient heat retention</a> in Europe. </p>
<p>Funding cuts to local authorities have contributed to cold homes, less energy-efficient housing, and greater fuel poverty, which in turn <a href="https://www.instituteofhealthequity.org/resources-reports/the-health-impacts-of-cold-homes-and-fuel-poverty/the-health-impacts-of-cold-homes-and-fuel-poverty.pdf">negatively affect health</a>. Older people are more likely to be vulnerable to the cold, including in poorly insulated homes, because they’re more likely to have existing medical conditions. </p>
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Read more:
<a href="https://theconversation.com/the-lie-at-the-heart-of-austerity-just-makes-inequality-worse-27138">The lie at the heart of austerity just makes inequality worse</a>
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<p>Then there was the NHS. Owing partly to the spending gap mentioned earlier, investment in health infrastructure, from <a href="https://www.ippr.org/news-and-media/press-releases/austerity-ripped-resilience-out-of-health-and-care-service-before-covid-19-crisis-hit-says-ippr">diagnostic scanners</a> to <a href="https://www.instituteforgovernment.org.uk/sites/default/files/publications/austerity-public-services.pdf">IT infrastructure</a>, <a href="https://www.theguardian.com/society/2022/dec/12/decade-of-neglect-means-nhs-unable-to-tackle-care-backlog-report-says">had almost dried up</a>. Facilities were literally <a href="https://www.theguardian.com/society/2022/aug/14/ministers-admit-hospital-buildings-england-roofs-could-collapse-any-time">falling apart</a>.</p>
<p>Cuts to <a href="https://www.nuffieldtrust.org.uk/news-item/what-was-austeritys-toll-on-the-nhs-before-the-pandemic">medical and nursing training</a> have been a major factor in the <a href="https://www.ippr.org/news-and-media/press-releases/austerity-ripped-resilience-out-of-health-and-care-service-before-covid-19-crisis-hit-says-ippr">chronic staff shortages</a> we now see, with places often filled by locum or <a href="https://www.bmj.com/content/379/bmj.o2749">agency staff</a>. These staff are not only more expensive but often unfamiliar with their working environment. </p>
<p>Paradoxically, spending cuts promoted as means <a href="https://www.gov.uk/government/news/new-efficiency-drive-to-cut-55-billion-of-government-waste">to increase efficiency</a> ultimately had the <a href="https://theconversation.com/the-lie-at-the-heart-of-austerity-just-makes-inequality-worse-27138">opposite effect</a>. </p>
<h2>Preparing for the next crisis</h2>
<p>Any argument that austerity placed the country’s economy on a sounder footing than would otherwise have been the case, making it better rather than worse prepared when the pandemic came, is misguided. </p>
<p>Leaving aside the questionable economics, this is akin to arguing that a ship’s captain should skimp on lifeboats so that he can send the cabin boy out to buy some when the ship is about to hit the iceberg.</p>
<p>Austerity policies shred the safety nets that those most economically vulnerable would otherwise depend on. Then, when people fall ill, these measures weaken the ability of health services to care for them. </p>
<p>The COVID pandemic will not be the last. One of the best things we can do to prepare for future pandemics is to <a href="https://www.lgcplus.com/services/health-and-care/sir-michael-marmot-we-must-not-return-to-austerity-15-11-2022/">avoid a return to austerity</a>.</p><img src="https://counter.theconversation.com/content/208240/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Simon Nicholas Williams has received funding from Senedd Cymru, Public Health Wales and the Wales Covid Evidence Centre for research on COVID-19, and has consulted for the World Health Organization. However, this article reflects the views of the author only, in his academic capacity at Swansea University, and no funding or organizational bodies were involved in the writing or content of this article.</span></em></p><p class="fine-print"><em><span>Martin McKee is the immediate past president of the British Medical Association and the European Public Health Association. He is not affiliated to any political party. His research is funded by UKRI, the Wellcome Trust, and Horizon Europe.</span></em></p>Evidence shows austerity has wide-ranging consequences for health.Simon Nicholas Williams, Lecturer in Psychology, Swansea UniversityMartin McKee, Professor of European Public Health, London School of Hygiene & Tropical MedicineLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2055952023-06-26T16:14:12Z2023-06-26T16:14:12ZThe British public often has unexpected opinions about welfare spending – here’s why<figure><img src="https://images.theconversation.com/files/530988/original/file-20230608-19-7qw788.jpg?ixlib=rb-1.1.0&rect=344%2C82%2C4543%2C1908&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>The soaring costs of energy and food have <a href="https://www.resolutionfoundation.org/publications/stressed-out/">diminished the value of incomes</a> for millions, leaving the majority of Britons <a href="https://obr.uk/box/developments-in-the-outlook-for-household-living-standards/">significantly poorer</a>. Wages have <a href="https://www.bbc.co.uk/news/business-60373405">failed to recover</a> since the 2008 financial crash and public services have suffered in <a href="https://www.instituteforgovernment.org.uk/publication/public-services-spending-round">availability and quality</a>.</p>
<p>We might expect this to amplify calls for the government to spend more to help the less well off, particularly as increasing numbers of people are affected. But public opinion about redistribution, shifting resources from society’s richer to support its poorer, doesn’t always follow an immediately obvious logic.</p>
<p>Evidence suggests that broadly redistributive policies, like increasing general taxation to fund public services, are <a href="https://www.aeaweb.org/articles?id=10.1257/pol.20190276#:%7E:text=Contrary%2520to%2520prevailing%2520wisdom%252C%2520people,they%2520consider%2520acceptable%2520for%2520others.">not always more popular among poorer people</a>. However, they are often supported by many of the wealthier individuals who <a href="https://www.journals.uchicago.edu/doi/full/10.1086/694201">stand to lose out financially</a>.</p>
<p>In a new systematic <a href="https://politicscentre.nuffield.ox.ac.uk/research/redistribution-report/">review</a> from the Nuffield Politics Research Centre, we draw upon more than 100 pieces of academic research to make sense of this conundrum. We suggest that both material changes to household finances, alongside more long-lasting psychological factors, are central to understanding why economic crises have nuanced effects on support for redistribution. They affect people in different ways, and our review explains how and why. </p>
<h2>Material and non-material factors</h2>
<p>There is reason to think people support redistribution when they stand to personally benefit from it. In their most simple form, these arguments suggest that those at the lower end of the wage scale will want the government to <a href="https://www.jstor.org/stable/1830813#metadata_info_tab_contents">increase taxes to fund more public spending</a>.</p>
<p>These arguments are powerful because many Britons rely on a regular income, <a href="https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/totalwealthingreatbritain/april2018tomarch2020">absent significant savings or housing assets</a>. When people do have access to such wealth, it also drives their social attitudes. As house prices rise, for instance, homeowners feel less reliant on the welfare state and become <a href="https://www.cambridge.org/core/journals/american-political-science-review/article/political-economy-of-ownership-housing-markets-and-the-welfare-state/F9F0C1F7146D3F35CA3856CD981E5567">less supportive of government spending</a>. When house prices fall, support for such spending rebounds.</p>
<p>But these accounts focus only on people’s present day circumstances, and so fail to capture the whole story. Long-term expectations are one example. A university student cleaning tables might not support higher taxes if they have a graduate job lined up at an investment bank. A low-income family might think differently about government spending if they stand to inherit property from their parents. <a href="https://www.cambridge.org/core/books/who-wants-what/64C476A5E9154D764AA84358736F1125">Some of today’s poor stand to be tomorrow’s rich</a>, and they know it.</p>
<figure class="align-center ">
<img alt="A couple standing in front of a house with a sold sign in front." src="https://images.theconversation.com/files/530989/original/file-20230608-15-i790b6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/530989/original/file-20230608-15-i790b6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=405&fit=crop&dpr=1 600w, https://images.theconversation.com/files/530989/original/file-20230608-15-i790b6.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=405&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/530989/original/file-20230608-15-i790b6.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=405&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/530989/original/file-20230608-15-i790b6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=509&fit=crop&dpr=1 754w, https://images.theconversation.com/files/530989/original/file-20230608-15-i790b6.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=509&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/530989/original/file-20230608-15-i790b6.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=509&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Views on welfare can depend on future prospects.</span>
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<p>We think eligibility and accessibility of government support are also key parts of the puzzle. Many poorer people in the UK find it <a href="https://www.jrf.org.uk/report/welfare-sanctions-and-conditionality-uk">difficult to access</a> the support to which they are entitled, with some analysts estimating that <a href="https://www.entitledto.co.uk/blog/2021/january/15plus-billion-unclaimed-means-tested-benefits-but-the-sketchy-take-up-data-makes-it-hard-to-say-for-sure/">up to £15 billion of means-tested benefits remain unclaimed each year</a>. The barriers put in place to make claiming benefits harder might shake people’s faith that the welfare system offers them a safety net, and question how much it contributes to society as a whole.</p>
<p>A lot of government spending also <a href="https://journals.sagepub.com/doi/10.1177/0958928714556970">helps middle-income Britons</a> more than their poorer counterparts. The best <a href="https://www.theguardian.com/society/2020/jan/23/englands-poorest-get-worse-nhs-care-than-wealthiest-citizens">healthcare</a> and <a href="https://schoolsweek.co.uk/schools-in-rich-areas-are-more-than-twice-as-likely-to-be-outstanding/">state schools</a> are usually found in the country’s wealthiest areas, while many services and subsidies, like tax-free savings allowances, <a href="https://www.which.co.uk/money/savings-and-isas/isas/cash-isas/are-isas-still-worthwhile-ajbZN3x6fWoO">cannot be fully exploited</a> by those on low incomes. Poorer individuals might support redistribution in principle, but in practice it is not always clear that they are the ones benefiting. </p>
<h2>Who deserves help?</h2>
<p>Away from cost-benefit style thinking, we consider how non-material factors might shape people’s attitudes. In public opinion surveys, a significant proportion of well-off people say they <a href="https://www.cambridge.org/core/books/who-wants-what/64C476A5E9154D764AA84358736F1125">support greater government spending</a> and would be willing to pay more tax to fund it. This circle is difficult to square in terms of self-interest alone.</p>
<p>In some circumstances, and at personal cost, richer individuals feel genuine concern for the wellbeing of others and are willing to <a href="https://www.journals.uchicago.edu/doi/full/10.1086/694201">redistribute resources to them</a>.</p>
<p>But the extent of this generosity is often limited and depends on someone’s definition of “others”. Altruism can be <a href="https://onlinelibrary.wiley.com/doi/full/10.1111/j.1467-6419.2011.00711.x">higher in countries that are less ethnically diverse</a> and support for redistribution is lower when the recipient is from a <a href="https://www.cambridge.org/core/journals/american-political-science-review/article/economic-versus-cultural-differences-forms-of-ethnic-diversity-and-public-goods-provision/1A668817F0A20FE9FF613B2247654A0E">minority ethnic group</a>. The same is sometimes true when the recipient is seen to be a member of a <a href="https://blogs.lse.ac.uk/politicsandpolicy/welfare-politics-discourse-public-opinion/">lower social class</a>.</p>
<p>Richer people might also adopt self-interested beliefs in meritocracy, with the poverty of others written off as stemming from a lack of effort rather than a lack of luck. Generosity only extends to certain groups of people. Altruism is not dead, but it is ‘parochial’.</p>
<p>Richer people might also adopt self-interested beliefs in meritocracy, with the poverty of others written off as stemming from <a href="https://www.sciencedirect.com/science/article/pii/S0167268121001116">lack of effort rather than lack of luck</a>. Generosity only extends to certain groups of people. Altruism is not dead, <a href="https://www.nature.com/articles/nature04981">but it is limited</a>.</p>
<p>Upbringing is also a part of the story. Being raised in a poorer household increases baseline <a href="https://www.sciencedirect.com/science/article/pii/009057209090030B">support for redistribution</a>, and this can colour the way that income shocks, or indeed financial comfort, are <a href="https://journals.sagepub.com/doi/full/10.1177/1470594X15618966">perceived in future</a>. Some wealthy individuals might be comfortable with redistribution because of their childhood experiences, while those born into wealth might remain averse even if they get poorer over time.</p>
<p>Some think that <a href="https://www.cambridge.org/core/journals/british-journal-of-political-science/article/how-do-economic-circumstances-determine-preferences-evidence-from-longrun-panel-data/73A1EA58796DA942A360401D01AB6BC5">only large shocks can truly shift the dial</a> on people’s beliefs, and perhaps Britain’s cost of living crisis – which has affected people across the income and upbringing distribution – represents such a case. But if those from wealthier backgrounds see the quickest financial recovery, any immediate changes in attitudes could be more short-lived.</p>
<p>All in all, despite seeing one of the deepest and most widespread shocks to household incomes in decades, it is not obvious that everyone will want more redistribution than they did before. This variability is essential for campaigners, policymakers, and politicians to understand, in order to devise policies that will remain sustainable over the long term.</p><img src="https://counter.theconversation.com/content/205595/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Alex Yeandle does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>It’s not always the case that poorer citizens want more public spending and richer people want less.Alex Yeandle, Research Review Writer, Nuffield Politics Research Centre, University of OxfordLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2070452023-06-07T16:48:56Z2023-06-07T16:48:56ZThe legal aid sector is collapsing and millions more may soon be without access to justice – new data<figure><img src="https://images.theconversation.com/files/530326/original/file-20230606-21-c0vhx5.jpg?ixlib=rb-1.1.0&rect=232%2C100%2C4935%2C3337&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A sector on the verge.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/law-offices-lawyers-legal-statue-greek-618830477">edwardolive/Shutterstock</a></span></figcaption></figure><p>The UK government has <a href="https://www.gov.uk/government/consultations/legal-aid-means-test-review/outcome/government-response-to-legal-aid-means-test-review--3">announced changes</a> to legal aid access in England and Wales, updating means test thresholds to account for inflation. These thresholds are the maximum amount of capital or income that a person can have to be eligible for legal assistance at public expense. </p>
<p>Under these changes, the government estimates that over 2 million more people will be eligible for civil legal aid each year. Eligibility, though, is not the same as access. The reality is that fewer and fewer people have access to civil legal aid advice and representation, because provision is collapsing. </p>
<p>Civil legal aid covers issues like housing, mental health, community care, immigration and asylum, and family law. The scope of these was much reduced by austerity measures in the Legal Aid, Sentencing and Punishment of Offenders <a href="https://www.legislation.gov.uk/ukpga/2012/10/contents/enacted">(LASPO)</a> Act 2012. </p>
<p>I obtained legal aid provision figures from the Ministry of Justice’s Legal Aid Agency, via a freedom of information request, covering the 12 months from September 2021 to August 2022 (the last full year available). The numbers, combined with <a href="https://www.gov.uk/government/publications/directory-of-legal-aid-providers">publicly available data</a>, paint a picture of a collapsing sector. </p>
<p>There was a 20% <a href="https://www.lag.org.uk/article/214219/the-new-lord-chancellor-faces-a-legal-aid-sector-on-the-verge-of-collapse">reduction</a> in the number of housing legal aid providers in the 18 months to March 2023. The same period saw a 21% loss of legal aid providers for mental health, and a 27% loss in welfare benefits. In immigration and asylum, over 30% of the providers given contracts in September 2018 had stopped doing legal aid work by March 2023.</p>
<p>Providers (private law firms or charities) are given contracts by the Legal Aid Agency to provide legal aid in specific areas of law – but they cannot be compelled to take on cases.</p>
<p>In fact, the current situation is worse than even these figures suggest, because 30% of the housing provider offices (129) did not undertake any new legal aid cases in the year to 31 August 2022. Nine of the 131 geographical “procurement areas” in England and Wales saw no new housing cases opened in that year. </p>
<p>Often, this is because they are unable to recruit any qualified lawyers on the salaries available, or because they cannot afford to take on legal aid cases. Others take on very small numbers of cases because they are at capacity, given the number of lawyers they can afford. </p>
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Read more:
<a href="https://theconversation.com/legal-aid-at-70-how-decades-of-cuts-have-diminished-the-right-to-legal-equality-120905">Legal aid at 70: how decades of cuts have diminished the right to legal equality</a>
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<p>In welfare benefits, a staggering 71% of offices did not report any new legal aid cases in the year, though this is largely because legal aid is now only available for Upper Tribunal and higher court appeal cases. </p>
<p>Even in community care, which was much less affected by the LASPO cuts, 41% of the 127 contracted offices undertook no new legal aid matters in the year, and 17% of offices stopped doing legal aid work in the 18 months to March 2023. Only ten new matters were reported in the north-east of England, and 12 in the south-east (excluding London).</p>
<h2>Demand outstripping supply</h2>
<p>Importantly, these figures do not indicate a lack of demand for the services of legal aid providers. In asylum, the last year saw <a href="https://rli.blogs.sas.ac.uk/2022/11/04/new-freedom-of-information-data-indicates-half-of-asylum-applicants-are-unable-to-access-legal-aid-representation/">at least 25,000</a> more applicants for legal aid than providers had capacity to take on. This is at least a 45% deficit, and only includes main applicants (not their dependants).</p>
<p>A housing lawyer <a href="https://www.lawgazette.co.uk/news-focus/news-focus-laspo-at-10-can-the-damage-be-undone/5115627.article">described</a> having so much demand at her firm that they have to allocate a senior solicitor to triage the most desperate cases, turning away the rest. </p>
<p>There is a clear regional inequality to provision of legal aid. For example, the Legal Aid Agency <a href="https://www.gov.uk/government/news/civil-news-further-tender-to-replace-hpcds-services-opens">failed</a> to find any providers at all for 11 areas to deliver its new, court-based early advice scheme to prevent housing loss. </p>
<p>Legal aid providers report difficulties recruiting across all areas of law, given the loss of lawyers and the overall low fees. Civil legal aid fees have <a href="https://publiclawproject.org.uk/content/uploads/2023/01/230123_New-Fees-for-New-Services-consultation-response-ILPA-PLP-statement.pdf">not increased at all</a> since fixed fees were introduced for most work in 2007, and have fallen significantly in real terms. </p>
<p>There is also a huge amount of unpaid admin and bureaucracy imposed by the Legal Aid Agency. There are serious delays in payment to providers because most work is paid for at the end of the case. But lawyers often cannot close and bill their cases because of slow processing by government departments and the courts.</p>
<h2>An unworkable policy</h2>
<p>Even after the <a href="https://lapg.co.uk/lapg-statement-on-the-governments-published-response-to-the-legal-aid-means-test-review/">means test changes</a>, in England and Wales the new limits to qualify for legal aid are £7,000 in capital (such as savings and other financial assets) and gross income of no more than £946 a month (£11,352 per year), with additional allowances for dependants. A person might also qualify for legal aid, but have to pay a contribution, if they have a disposable (rather than gross) income of up to £946 per month.</p>
<p>There is no regular review mechanism to update these limits in line with inflation. Critics point out that this consultation, launched in March 2022, was already out of date by the time the response was published in May 2023.</p>
<p>There is <a href="https://walkerlaird.co.uk/legal-aid-in-scotland-a-guide-to-eligibility-legal-aid-contributions/">greater eligibility</a> in Scotland. The threshold for capital is £13,017 and the disposable income threshold for full legal aid is £3,521 per year. Clients with disposable incomes of up to £26,239 remain eligible to pay legal aid rates rather than private rates, though they may have to contribute more as their income goes up.</p>
<p>The UK’s legal aid capacity crisis has been a long time building, but it has come to a head with cost of living concerns – and is likely to become even sharper with the government’s plans to <a href="https://theconversation.com/how-the-uks-plan-to-send-asylum-seekers-to-rwanda-is-21st-century-imperialism-writ-large-181501">remove asylum seekers to Rwanda</a>. Civil servants have reportedly warned the government that it will <a href="https://www.theguardian.com/uk-news/2023/may/25/braverman-bill-could-lead-to-3000-asylum-seekers-being-deported-a-month">have to increase legal aid fees</a> for asylum work, otherwise it will be impossible for people to access legal advice before being removed. </p>
<p>If the UK government fails to ensure the viability and availability of legal aid, there will be no more lawyers to provide advice and representation for millions of <a href="https://theconversation.com/the-home-office-is-sabotaging-its-own-plan-to-tackle-the-asylum-backlog-200759">newly-eligible</a> (and desperately needy) people. This is what happens when legal aid is cut too far. The system survives for a period of time on goodwill, and then it collapses.</p><img src="https://counter.theconversation.com/content/207045/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jo Wilding receives funding from the ESRC for the research on which this article is based.</span></em></p>Numbers obtained through a freedom of information request reveal the dire state of the legal aid sector in England and Wales.Jo Wilding, Lecturer in law, University of SussexLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2057042023-05-25T12:34:11Z2023-05-25T12:34:11ZImproving how the IMF does business could help billions of people worldwide — by giving governments money to spend on public goods and increasing accountability. Podcast<figure><img src="https://images.theconversation.com/files/526826/original/file-20230517-23266-2g9fwb.jpg?ixlib=rb-1.1.0&rect=258%2C64%2C8368%2C5678&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">People march with a banner that reads in Spanish 'Stop the adjustment, out with the IMF,' in Buenos Aires, Argentina on May 9, 2023.</span> <span class="attribution"><span class="source">(AP Photo/Victor R. Caivano)</span></span></figcaption></figure><p>In countries across the Global South, the launch of IMF programs often <a href="https://theconversation.com/when-the-imf-comes-to-town-why-they-visit-and-what-to-watch-out-for-188302">sparks considerable concern</a>. This is because of the IMF’s reputation: during the 1980s, many nations in Africa, Asia and Latin America turned to the IMF seeking loans to mitigate economic challenges. <a href="https://theconversation.com/imf-says-it-cares-about-inequality-but-will-it-change-its-ways-120105">These loans were accompanied by stringent conditions</a>, and countries faced pressure to reduce public subsidies and social spending, downsize the public sector workforce, and increase taxes.</p>
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<p>Originally <a href="https://www.imf.org/external/about/histcoop.htm">founded after the second world war</a>, the IMF aimed to provide a framework for countries to cooperate in managing their exchange rates and to facilitate international trade. Since then, it has evolved to provide financial assistance and support to countries facing economic crises and emergencies worldwide. Member countries contribute a certain amount of money to the IMF based on their economic size, and in turn, they are able to access loans as a means of aid. </p>
<p>During the recent COVID-19 pandemic, <a href="https://www.imf.org/en/Topics/imf-and-covid19/COVID-Lending-Tracker">the IMF extended loans to over 80 countries</a>. Presently, <a href="https://www.imf.org/external/np/fin/tad/balmov2.aspx?type=TOTAL">more than 90 countries remain indebted</a> to the IMF, with such loans being accompanied by policy conditions.</p>
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Read more:
<a href="https://theconversation.com/when-the-imf-comes-to-town-why-they-visit-and-what-to-watch-out-for-188302">When the IMF comes to town: why they visit and what to watch out for</a>
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<p>In this episode of <em>The Conversation Weekly</em>, we speak with two researchers about the impact of IMF loans on recipient countries and why countries continue to rely on IMF loans. We also discuss potential alternatives to this system.</p>
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<a href="https://images.theconversation.com/files/526561/original/file-20230516-11526-ru0y3p.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C4031%2C3024&q=45&auto=format&w=1000&fit=clip"><img alt="a plaque on a building showing the IMF logo and the text INTERNATIONAL MONETARY FUND" src="https://images.theconversation.com/files/526561/original/file-20230516-11526-ru0y3p.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C4031%2C3024&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/526561/original/file-20230516-11526-ru0y3p.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/526561/original/file-20230516-11526-ru0y3p.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/526561/original/file-20230516-11526-ru0y3p.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/526561/original/file-20230516-11526-ru0y3p.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/526561/original/file-20230516-11526-ru0y3p.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/526561/original/file-20230516-11526-ru0y3p.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">The International Monetary Fund has 190 member countries.</span>
<span class="attribution"><span class="source">(Shutterstock)</span></span>
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<h2>Ongoing impact of colonialism</h2>
<p><a href="https://www.chr.up.ac.za/centre-staff/daniel-bradlow">Danny Bradlow</a>, a professor of international development law and African economic relations and senior fellow at the University of Pretoria in South Africa, highlights the harmful effects of IMF-imposed austerity measures. </p>
<p>The ongoing impact of colonialism means many countries in the Global South “were in a very dire situation to begin with,” Bradlow explains. “The IMF said if you follow our policy prescriptions, things will turn around and you’ll do much better.” </p>
<p>The measures imposed by the IMF limited access to healthcare and education for poorer people. Throughout the 1980s, the IMF pressured country after country — in what’s often known as <a href="https://theconversation.com/imf-says-it-cares-about-inequality-but-will-it-change-its-ways-120105">Structural Adjustment Programs</a> — with lasting damage on economies and populations.</p>
<p>The policy measures dictated by the IMF also had detrimental environmental consequences. To encourage economic growth, many countries were pressured to shift “from producing food to producing agricultural products that you could sell on the global markets,” Bradlow says. “Often that meant you were using more environmentally damaging fertilizers, or you were doing extractive mining projects that were environmentally damaging. In some cases it was logging, so countries would tear down forests.”</p>
<h2>Prolonged debt and austerity</h2>
<p><a href="https://profiles.uonbi.ac.ke/attiya/">Attiya Waris</a> is associate professor of fiscal law and policy at the University of Nairobi in Kenya, and an <a href="https://www.ohchr.org/en/special-procedures/ie-foreign-debt/attiya-waris">expert on foreign debt and international financial obligations</a> and their implications for human rights.</p>
<p>As part of her work, Waris sheds light on the experiences of Argentina and Pakistan. Both countries have received multiple loans since the 1950s to address economic challenges such as inflation, currency devaluation, and external debt crises. <a href="https://www.imf.org/en/Countries/ARG">Argentina currently holds the highest outstanding debt</a> of US$46 billion, <a href="https://www.imf.org/en/Countries/PAK">while Pakistan ranks fifth</a> with US$7.4 billion.</p>
<p>“Pakistan is one of 14 countries across the world that has a loan with the IMF that has a surcharge on it. A surcharge means that if you are paying a 1% interest rate and you default on your payments, then you’ll be paying 3%. So you’re being penalized for being unable to pay,” Waris explains. This in turn increases the likelihood of prolonged debt and austerity.</p>
<p>But for Waris, one of the biggest problems is that the contracts around IMF loans are extremely opaque, meaning it’s difficult to hold the institution to account or even evaluate what impact it has beyond the austerity measures.</p>
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<a href="https://images.theconversation.com/files/526827/original/file-20230517-25100-qe6olr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="a woman draped in a black, yellow and red — the colours of the Ugandan flag — shouts at a protest" src="https://images.theconversation.com/files/526827/original/file-20230517-25100-qe6olr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/526827/original/file-20230517-25100-qe6olr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/526827/original/file-20230517-25100-qe6olr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/526827/original/file-20230517-25100-qe6olr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/526827/original/file-20230517-25100-qe6olr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/526827/original/file-20230517-25100-qe6olr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/526827/original/file-20230517-25100-qe6olr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Demonstrators with the ‘People Power Movement,’ protesting the Ugandan government, join protests outside of the IMF and World Bank Spring Meetings on April 14, 2023, in Washington.</span>
<span class="attribution"><span class="source">(AP Photo/Mariam Zuhaib)</span></span>
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<p>“This is problematic because there can be no societal oversight over what a group of human beings in their country are deciding to take on, on their behalf,” she says. “Representative, democratic or otherwise, people need to know what their governments are doing on their behalf.”</p>
<p>For Bradlow there are signs for positive change. <a href="https://doi.org/10.1093/jiel/jgac064">A recent research paper shows</a> that the IMF acknowledges some of the devastating impacts it has had on countries. In the paper, it identifies areas of enhanced focus, including climate change, gender, inequality, and social protection. However, while the IMF has adapted its focus and policies to address some of the negative consequences, it remains uncertain how it will achieve these goals.</p>
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Read more:
<a href="https://theconversation.com/government-debt-wont-necessarily-burden-future-generations-but-austerity-will-194658">Government debt won't necessarily burden future generations – but austerity will</a>
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<p>The Conversation has reached out to the International Monetary Fund for comment regarding the issues covered in this episode and is awaiting response.</p>
<p>Listen to the full episode of <em>The Conversation Weekly</em> to learn more about the impact of IMF loans on recipient nations, the potential benefits of allocating funds for public services in the Global South, and the importance of implementing accountability mechanisms within the IMF.</p>
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<p>This episode was written and produced by Mend Mariwany, who is also the executive producer of <em>The Conversation Weekly</em>. Eloise Stevens does our sound design, and our theme music is by Neeta Sarl.</p>
<p>You can find us on Twitter <a href="https://twitter.com/TC_Audio">@TC_Audio</a>, on Instagram at <a href="https://www.instagram.com/theconversationdotcom/">theconversationdotcom</a> or <a href="mailto:podcast@theconversation.com">via email</a>. You can also subscribe to The Conversation’s <a href="https://theconversation.com/newsletter">free daily email here</a>.</p>
<p>Listen to “The Conversation Weekly” via any of the apps listed above, download it directly via our <a href="https://feeds.acast.com/public/shows/60087127b9687759d637bade">RSS feed</a> or find out <a href="https://theconversation.com/how-to-listen-to-the-conversations-podcasts-154131">how else to listen here</a>.</p><img src="https://counter.theconversation.com/content/205704/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Attiya Waris does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p><p class="fine-print"><em><span>Danny Bradlow receives funding from South Africa’s National Research Foundation. He does not work for, consult or own shares from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The conditions placed on countries borrowing money from the International Monetary Fund have further disadvantaged these countries economically.Mend Mariwany, Producer, The Conversation Weekly, The Conversation Weekly PodcastNehal El-Hadi, Science + Technology Editor & Co-Host of The Conversation Weekly Podcast, The ConversationLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2044152023-05-15T15:43:18Z2023-05-15T15:43:18ZEsol English classes are crucial for migrant integration, yet challenges remain unaddressed<p><em>You can also read this article <a href="https://theconversation.com/esol-pwysigrwydd-dosbarthiadau-saesneg-i-ymfudwyr-ar-heriau-iw-datrys-205783">in Welsh</a>.</em> </p>
<p>In the year ending September 2022, <a href="https://www.gov.uk/government/statistics/immigration-system-statistics-year-ending-december-2022/summary-of-latest-statistics">more than 70,000 people</a> had claimed asylum in the UK. The vast majority were from countries that do not use English as a first language. </p>
<p>Being able to communicate in English is essential for newly arrived migrants. People who have gone through traumatic experiences are, understandably, often desperate to build new lives. They want to use the skills and knowledge they have to access work and education. To do that, they have to navigate the health, social security, housing and education systems. </p>
<p>Language is the single most important area that can promote integration for migrants. My research has shown that <a href="https://www.academia.edu/44971642/Exploring_ESOL_Teacher_Working_Conditions_and_Professional_Development_In_England_And_Wales">language teachers</a> are uniquely placed to positively affect the lives of people in these situations. </p>
<p>In fact, the 2016 <a href="https://www.gov.uk/government/publications/the-casey-review-a-review-into-opportunity-and-integration">Casey review</a>, a government-commissioned report on the state of social cohesion in Britain, highlighted that developing fluency in English is critical to integration.</p>
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Read more:
<a href="https://theconversation.com/its-like-youre-a-criminal-but-i-am-not-a-criminal-first-hand-accounts-of-the-trauma-of-being-stuck-in-the-uk-asylum-system-202276">'It’s like you’re a criminal, but I am not a criminal.' First-hand accounts of the trauma of being stuck in the UK asylum system</a>
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<p>Given its importance, refugees and people seeking asylum are often keen to enrol in English for Speakers of Other Languages (Esol) classes. And these classes can provide more than language tuition alone. They are a social space, providing a sense of structure to daily lives, offering both linguistic and psychological support. </p>
<p>But <a href="https://ifs.org.uk/news/plans-will-leave-spending-adult-education-and-apprenticeships-25-below-2010-levels-2025#:%7E:text=Press%20Release-,Plans%20will%20leave%20spending%20on%20adult%20education%20and%20apprenticeships,below%202010%20levels%20by%202025&text=Total%20spending%20on%20adult%20education,as%20compared%20with%202010%E2%80%9311.">cuts to adult education budgets</a> following the change of government in 2010, and the introduction of austerity, mean access to Esol language support is often difficult. There can be long waiting lists and <a href="https://www.mdpi.com/2226-471X/4/3/74">too few classes</a> available. </p>
<p>Also, the way adult education is funded in the UK means teachers are obliged to follow an assessment system to measure language competence. That constraint frequently results in classroom time being focused more on passing exams than on developing fluency or bestowing a warm welcome and sense of belonging. </p>
<p>While coping with the demands of building a life in a different country through a new language, many Esol learners are also dealing with the trauma associated with forced displacement. That’s on top of the <a href="https://lordslibrary.parliament.uk/research-briefings/lln-2018-0064/">stress involved</a> in navigating an often hostile and complex asylum system. </p>
<p>Such challenges mean Esol teachers can be a vital bridge to the new society. And the Esol classroom can be the prime location for getting information and for creating the bonds needed for successful integration. With that in mind, how Esol classes are organised and managed is fundamental to a person’s success in learning English and all the associated opportunities. </p>
<p>However, providing Esol classes, primarily through colleges of further education, is a hugely bureaucratic undertaking. This often results in the potential of Esol classes to promote integration being missed. </p>
<p>One of the reasons is that these classes are funded in the same way as other adult education subjects. Accordingly, teachers must follow a curriculum that provides evidence that learners are progressing. This results in teachers putting their efforts into preparing students for constant tests and assessments. And that leaves little time to address the real-life concerns, needs and interests of their migrant learners. </p>
<p>It also means the opportunities to bring about a sense of belonging are instead replaced with learning about matters such as verb conjugations and the English tense system. </p>
<p>Changes are needed to both the way Esol is funded and organised, and to the way Esol professionals are educated to view the language classroom. </p>
<h2>Solutions</h2>
<p>Removing some of the requirements to produce evidence of learning would shorten teacher administration time. It would also relieve the pressure on students and teachers to be constantly preparing for the next assessment. This would allow more time to focus on discussing issues of relevance to the learners.</p>
<p>There is much support from language experts for viewing Esol from this more human perspective. It is an understanding of the classroom that resonates with educators who have been advocating for a <a href="https://www.teachingenglish.org.uk/sites/teacheng/files/pub_BC_NEXUS_booklet_web.pdf">participatory pedagogy</a> – which involves more collaboration and decision making among students – for Esol since the turn of the century.</p>
<p>This style of teaching focuses classroom content on the <a href="https://www.semanticscholar.org/paper/%22When-I-wake-up-I-dream-of-electricity%22%3A-The-lives%2C-Cooke/a9ad375c87803c59b586b05e3ce5825d4f758d9d">lives of learners</a>. Examples of typical issues that dominate such discussions include the challenge of finding meaningful employment, the effects of trauma, culture shock, separation from family, money worries and finding accommodation.</p>
<p>This means more time is taken up with learners using language to express thoughts, anxieties, hopes and concerns that affect their new lives. And far less time is used by the teacher striving to cover an externally imposed syllabus. </p>
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<figcaption><span class="caption">Creative workshops to enhance language acquisition and integration for people seeking sanctuary.</span></figcaption>
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<p>Thinking afresh about language education for forced migrants means considering how a participatory approach may be an effective way to welcome newcomers and help with their integration. With little effort, language education for migrants could allow space for the development of projects that bring people together. It could foster friendship and understanding while also promoting language development.</p>
<p>Esol is not just another academic subject, it is the most important area that promotes integration. But, at present, opportunities to provide holistic, person-centred language education to people seeking refuge in the UK are being missed because of the overly bureaucratic and exam-focused system that prevails.</p><img src="https://counter.theconversation.com/content/204415/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Mike Chick is affiliated with the Welsh Refugee Council as a Trustee</span></em></p>Although English to speakers of other languages (Esol) is treated like any other subject, it can offer far more to those learners.Mike Chick, Senior Lecturer in TESOL/English, University of South WalesLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2023882023-03-29T10:47:43Z2023-03-29T10:47:43ZWhy economic growth alone will not make British society fairer or more equal<p>In presenting his <a href="https://theconversation.com/spring-budget-2023-experts-react-to-uk-governments-plan-to-get-the-economy-moving-201893">spring budget</a>, the British chancellor, Jeremy Hunt, claimed his plans are all about <a href="https://www.gov.uk/government/publications/spring-budget-2023">growth</a>. For the leader of the opposition, Keir Starmer, growth is his key “<a href="https://labour.org.uk/missions/">mission</a>”. </p>
<p>Higher growth – of the right kind – is a desirable goal. But Britain has a dismal record on this front. The rate of economic growth in the UK has <a href="https://www.statista.com/statistics/281734/gdp-growth-in-the-united-kingdom-uk/">slowed sharply</a> since the millennium. Today it is <a href="https://commonslibrary.parliament.uk/research-briefings/sn02784/">lower</a> than those of other rich nations. </p>
<p>However, this is only one of the multifaceted problems the country faces. Levels of poverty are <a href="https://ifs.org.uk/living-standards-poverty-and-inequality-uk">double</a> those of the 1970s. The <a href="https://data.oecd.org/inequality/income-inequality.htm">income gap</a> between rich and poor is wider than in nearly all other countries. And <a href="https://theconversation.com/nhs-recovery-plan-why-an-extra-2-6-billion-is-not-enough-without-more-staff-199633">key public services</a> have been <a href="https://theconversation.com/cost-of-living-crisis-the-uk-needs-to-raise-taxes-not-cut-them-heres-why-188938">starved of resources</a>. </p>
<p>Neither the Labour party nor the Conservatives have much to say about these multifaceted crises, nor how to tackle them. The message seems to be that without faster growth, little can be done – a stance which recent history shows is far from the solution to either rising poverty or social frailty. </p>
<p>My research <a href="https://policy.bristoluniversitypress.co.uk/the-richer-the-poorer">shows</a> that the gains from economic activity in recent decades have been increasingly captured by a small, rich elite, while many post-war social gains have been reversed. This has been greatly exacerbated by <a href="https://neweconomics.org/2019/02/austerity-is-subduing-uk-economy-by-more-than-3-600-per-household-this-year">rolling austerity measures</a> since 2010. </p>
<h2>Personal enrichment</h2>
<p>Britain’s pro-rich, anti-poor bias is central to its broken economy and fractured society. In recent decades, key determinants of national strength – rates of innovation, <a href="https://www.tuc.org.uk/news/uk-near-bottom-oecd-rankings-national-investment">investment</a>, labour force skills and the quality of social support – have lagged those of our competitors. </p>
<p>A primary, if not the only reason for this failure, has been the way business activity, too often aided by misplaced state policies, has been increasingly geared to quick personal enrichment. This process of “corporate extraction” by a small elite has come at the expense of the long-term wealth creation that would boost economic resilience and serve the common good. </p>
<p>Neoliberal economists <a href="https://prospect.org/economy/neoliberalism-political-success-economic-failure/">claim</a> that weaker state regulation makes markets more competitive. However, more relaxed rules hand greater freedoms to boardrooms, enabling them to consolidate corporate power. Key markets, from banking and audit to pharmaceuticals and housebuilding, are now dominated by a few narrowly owned and controlled <a href="https://www.economist.com/britain/2018/07/26/the-british-economy-is-becoming-more-concentrated-and-less-competitive">companies</a>.</p>
<p>Many large corporations have been turned into cash cows for owners and executives. Boardrooms have adopted <a href="https://www.competitionpolicyinternational.com/uk-regulator-warns-big-tech-of-future-antitrust-probes/">anti-competitive devices</a>, from killing off rivals to price collusion. This is a return of what the American economist Thorstein Veblen <a href="https://www.taylorfrancis.com/books/mono/10.4324/9781351304207/engineers-price-system-thorstein-veblen-daniel-bell">termed</a> “market sabotage” over a century ago. </p>
<p>Such practices crowd out the kind of innovation that offers greater social value. Since the Victorian era, they have been a central driver of Britain’s low wage, low productivity and high poverty economy. And their return in recent decades has become a key barrier to social and economic progress. </p>
<p>Instead of private investment and wages being boosted, the rising profits of recent times – which have continued to grow during the pandemic – have been siphoned off in disproportionate payments to <a href="https://www.tuc.org.uk/sites/default/files/2019-11/ShareholderReturnsreport.pdf">shareholders</a> and executives. </p>
<p>A 2019 report from the Trades Union Congress reported that three-quarters of the profits of FTSE 100 companies were returned to shareholders in buy-backs and dividends in the four years from 2015. </p>
<p>With UK corporations <a href="https://insight.factset.com/institutional-ownership-in-the-uk">increasingly owned</a> by overseas institutional investors – notably US asset management firms – little of this flow has ended up in UK pension and insurance funds or been fed back into the domestic economy. </p>
<h2>Wealth creation versus appropriation</h2>
<p>In 1896, the influential Italian economist <a href="https://global.oup.com/academic/product/manual-of-political-economy-9780199607952?cc=gb&lang=en&">Vilfredo Pareto</a> distinguished between “value-added activity” that brings gains across society and “extractive” or “appropriative” business practices that benefit a powerful minority. </p>
<p>Appropriation was commonplace in the 19th century. With the return of concentrated power, such practices have once again become dominant. These <a href="https://policy.bristoluniversitypress.co.uk/the-richer-the-poorer">include</a> the rigging of financial and product markets and the skimming of returns from financial transactions. </p>
<p>Consortiums of private-equity investors seeking fast and inflated returns have taken over many publicly listed companies (from motoring group <a href="https://www.theguardian.com/business/2020/nov/25/aa-agrees-takeover-deal-private-equity-investors-motoring-uk">the AA</a>, to retailers <a href="https://www.irishtimes.com/business/retail-and-services/topshop-25-sold-to-private-equity-firm-1.1441">Topshop</a>, <a href="https://www.thisismoney.co.uk/money/markets/article-9011535/How-Debenhams-never-recovered-brutal-private-equity-era.html">Debenhams</a> and <a href="https://news.sky.com/story/morrisons-us-private-equity-firm-wins-7bn-auction-for-uk-supermarket-12423755">Morrisons</a>, to name a few). In many cases, including Debenhams and Topshop owner <a href="https://www.nytimes.com/2020/11/30/business/british-retailer-arcadia-group-owner-of-topshop-files-for-bankruptcy.html">Arcadia Group</a>, this has weakened long-term viability. </p>
<p>Key public services are now undergoing similar treatment. <a href="https://ideas.repec.org/p/soa/wpaper/238.html">Social care</a>, once provided largely by public agencies, has become a <a href="https://academic.oup.com/ageing/article/51/12/afac222/6936404">key target</a> for the private buy-out industry. As a result, significant proportions of public money are being effectively <a href="https://www.ft.com/content/3af0a105-c2fe-4259-b7cd-bba7ddf0de2a">siphoned off</a> by the new providers. </p>
<p>These trends have had a mostly damaging effect on the way society functions. An important effect of the process of wealth accumulation, for example, has been the diversion of resources from meeting the basic needs of all citizens to feed the lifestyles of the wealthiest. </p>
<p>As a result we are seeing the reappearance of what the American economist JK Galbraith <a href="https://archive.org/details/JohnKennethGalbraithTheAffluentSociety1998MarinerBooks/page/n9/mode/2up">once called</a> “private affluence and public squalor”. Since 2010, at least 1,000 Sure Start childcare and family services centres <a href="https://www.suttontrust.com/news-opinion/all-news-opinion/1000-childrens-centres-closed-since-2009/">have folded</a> in England. <a href="https://www.thelondoneconomic.com/news/chronic-underfunding-by-the-tories-youth-services-funding-cut-by-73-in-under-a-decade-221282/">Cuts in council spending</a> have led to the loss of more than 4,500 youth worker jobs. </p>
<p>Compare britain’s low level of <a href="https://www.statista.com/chart/24050/social-spending-by-country/">social investment</a> with the surging demand for <a href="https://www.theguardian.com/world/2021/sep/30/demand-for-private-jets-soars-as-rich-travellers-try-to-avoid-mosh-pit">private jets</a>. Land that could be used to build social housing <a href="https://www.vice.com/en/article/vb5mmy/housing-associations-building-luxury-homes-uk">has been swallowed up</a> by luxury developments. </p>
<h2>Post-war social reforms</h2>
<p>When Clement Attlee became UK prime minister in 1945, his Labour government inherited a society shattered by war. The public was hungry for change. Heeding economist and social reformer William Beveridge’s 1942 <a href="https://www.parliament.uk/about/living-heritage/transformingsociety/livinglearning/coll-9-health1/coll-9-health/">warning</a> that Britain needed “more than patching”, he ignored the nation’s historic debt crisis (the result of paying for the war). </p>
<p>Instead, <a href="https://theconversation.com/could-post-war-drive-for-a-more-equal-society-help-with-todays-cost-of-living-crisis-185743">he launched</a> an unprecedented programme of social spending that took priority over boosting private consumption. Ground-breaking and popular reforms included the National Health Service, a comprehensive, compulsory and universal system of national insurance, and family allowance benefits. </p>
<p>The strategies of both main political parties today contain a central contradiction. Higher growth alone, even if it can be delivered, will not bring a stronger, fairer and more equal society. That requires a transformative plan to tackle the way in which so much of modern business strategy drives inequality. As in 1945, this means more than “patching”.</p><img src="https://counter.theconversation.com/content/202388/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Stewart Lansley does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Prioritising economic growth without a plan to curb exploitative business practices is not a solution. The UK needs a return to the forward-thinking social reforms of 1945.Stewart Lansley, Visiting Fellow, School of Policy Studies, University of BristolLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2015042023-03-14T15:47:36Z2023-03-14T15:47:36ZWhy government budgets are exercises in distributing life and death as much as fiscal calculations<p>Sacrificial dilemmas are popular among philosophers. Should you divert a train from five people strapped to the tracks to a side-track with only one person strapped to it? What if that one person were a renowned cancer researcher? What if there were only a 70% chance the five people would die?</p>
<p>These questions sound like they have nothing to do with a government budget. These annual events are, after all, conveyed as an endeavour in accounting. They are a chance to show anticipated tax revenues and propose public spending. We are told the name of the game is “fiscal responsibility” and the goal is stimulating “economic growth”. Never do we talk of budgets in terms of sacrificing some lives to save others.</p>
<p>In reality, though, government budgets are a lot like those trains, in philosophical terms. Whether explicitly intended or not, some of us take those trains to better or similar destinations, and some of us will be left strapped to the tracks. That is because the real business of budgets is in distributing death and life. They are exercises in allocating misery and happiness.</p>
<p>Take the austerity policies introduced by the UK government in 2010 and the following years. Studies put the mortality cost of spending cuts between 2010 and 2014 at approximately <a href="https://bmjopen.bmj.com/content/7/11/e017722">150,000 excess deaths</a>. A more recent study suggested that <a href="https://jech.bmj.com/content/jech/early/2022/09/26/jech-2022-219645.full.pdf">335,000</a> excess deaths could be attributed to the austerity of the 2010s.</p>
<p>These are contestable figures – and they cannot draw a direct causal relationship between specific austerity policies and number of deaths. But even if it is impossible to assign an accurate death toll to austerity, it should come as no surprise that reducing welfare spending will reduce, well, welfare. The same is true in reverse. An England-focused <a href="https://pubmed.ncbi.nlm.nih.gov/34654700/">study</a> suggests that by increasing healthcare expenditure by 1%, around 300,000 deaths could have been avoided in the wake of 2010 cuts. </p>
<p>This has a sobering implication: knowingly or not, a decision is effectively made to let 300,000 die if healthcare expenditure isn’t increased by 1%.</p>
<p>Similarly, there is a clear <a href="https://theconversation.com/cost-of-living-crisis-the-health-risks-of-not-turning-the-heating-on-in-winter-190035">link between fuel poverty and premature deaths</a>. It is difficult to derive a precise figure, but it’s almost certain that a government decision not to further subsidise energy bills will trigger otherwise preventable deaths.</p>
<p>There is a truism in all this: resources are limited, and decisions inevitably come with trade-offs and opportunity costs.</p>
<p>For instance, austerity was a response to a severe economic downturn. Recessions reduce how much revenue a government has to spend on services, which leads to the loss of lives and livelihoods. Even for those who don’t suffer in the extreme, life is generally less liveable for many of us. For all we know, the global financial crisis would have (eventually) led to tens of thousands of additional deaths no matter how the government responded.</p>
<h2>The values smuggled into budgets</h2>
<p>Budgets are of course hugely complicated, but this is all to show that while it is true that they involve accounting, the morally relevant currency of what is being accounted for is ultimately our wellbeing, including its loss through death.</p>
<p>For instance, assume it is indeed true that 300,000 deaths could be prevented by a 1% increase in healthcare spending. Assume also that using these funds in some other way (such as on education and home insulation) would in the long term prevent far more deaths, or, significantly improve the quality of several million lives.</p>
<p>Suddenly, talk of fiscal responsibility seems to miss the point. We are faced with a much more philosophically loaded debate. It becomes pertinent to say, hang on, just how much extra wellbeing for some do you think can make up for the deaths of 300,000 others? And how sure are you about this?</p>
<p>It starts to become obvious how value judgments infuse and implicitly guide these fiscal decisions that, unwittingly or not, involve weighing up certain lives against others, present lives against future ones, and proxies for wellbeing (such as job creation) against others (such as preventing premature deaths).</p>
<p>The risk of the language of “boosting the economy” is that it gives these monumental decisions in ethics a veneer of being value-free budgetary exercises in “following the evidence”, stopping us from seeing how the economic sausage is actually made.</p>
<p>Of course, evidence-based policy is better than unevidenced policy. What is missing is values-transparent policy, and that starts with the philosophical task of laying bare the precise value judgments that go into constructing what we’re told are “good economic outcomes”.</p>
<p>While the <a href="https://obr.uk/about-the-obr/what-we-do/">Office of Budget Responsibility</a> independently assesses the economic credibility of the budget, no corresponding institution works to uncover its ethical assumptions and value trade-offs. Welfare economists and ethicists need to forge a new relationship that initiates and guides the uncomfortable public conversation of how government budgets inevitably trade-off lives and livelihoods, now and against the future.</p>
<p>Equally crucial, by instituting norms that encourage uncovering all the value-judgments smuggled beneath the guise of sanitised fiscal and economic talk, we might reduce the chances of opportunistic politicians gambling with millions of livelihoods by redirecting the train in the name of one ideology or another.</p><img src="https://counter.theconversation.com/content/201504/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Hazem Zohny does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>We talk about ‘fiscal responsibility’ but rarely are a government’s annual accounting exercises assessed in ethical terms.Hazem Zohny, Research Fellow in Practical Ethics, University of OxfordLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2015782023-03-14T14:26:54Z2023-03-14T14:26:54ZNigeria’s central bank made critical mistakes that doomed the country’s currency redesign<figure><img src="https://images.theconversation.com/files/515118/original/file-20230314-17-ybroa7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">People queue outside a bank in Lagos on February 22, 2023. Nigeria was hit with a scarcity of cash after the central bank began to swap old Naira notes for new bills.</span> <span class="attribution"><span class="source">Patrick Meinhardt / AFP</span></span></figcaption></figure><p>Nigeria has successfully <a href="https://www.cbn.gov.ng/Currency/historycur.asp">introduced new banknotes</a> on about 10 occasions since independence in 1960. So why has the latest attempt been so controversial and traumatic? And what measures need to be taken to avoid a future debacle? </p>
<p>Nigeria’s central bank <a href="https://www.cbn.gov.ng/Out/2022/CCD/Naira_Redesign.pdf">announced the introduction of new banknotes</a> last November, with the changeover to new notes scheduled for mid-December. The rollout of the policy disintegrated into chaos, amid mounting anger among ordinary Nigerians.</p>
<p>The rollout of the currency change was <a href="https://www.premiumtimesng.com/news/top-news/585737-timeline-naira-redesign-policy-from-inception-to-supreme-court-judgement.html">disastrous</a>. The fallout included:</p>
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<li><p><a href="https://www.reuters.com/world/africa/nigerian-court-extends-old-banknotes-dec-31-amid-cash-shortage-2023-03-03/">Severe shortages</a> of the new banknotes.</p></li>
<li><p>Precipitous <a href="https://www.spglobal.com/marketintelligence/en/mi/research-analysis/nigeria-cash-crisis-hits-activity-in-february-mar23.html">declines</a> in business transactions (especially in the informal sector). </p></li>
<li><p><a href="https://www.ft.com/content/952e8047-63a9-4a91-8f15-6f00cd388a95">Long queues</a> at bank premises and overcrowded banking halls</p></li>
<li><p><a href="https://punchng.com/protesters-target-banks-atms-battle-security-forces/">Attacks</a> on bank staff and destruction of bank property, including ATMs that failed to dispense cash. </p></li>
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<p>The policy also led to <a href="https://www.bloomberg.com/news/articles/2023-02-06/governors-sue-nigeria-over-naira-redesign-as-cash-vanishes">lawsuits</a> by some state governors against the Central Bank of Nigeria and the Federal Government.</p>
<p>I have identified five factors that marred the redesign policy, most of which could have been avoided by the Central Bank of Nigeria.</p>
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<a href="https://theconversation.com/nigerias-currency-redesign-and-withdrawal-limits-questionable-policy-and-bad-timing-197813">Nigeria’s currency redesign and withdrawal limits: questionable policy and bad timing</a>
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<h2>Litany of errors</h2>
<p><strong>Cost-benefit:</strong> An egregious error committed by the central bank was its violation of the principle of <a href="https://online.hbs.edu/blog/post/cost-benefit-analysis">cost-benefit analysis</a>. This is a simple rule in economics that implores policy makers to undertake an initiative only when the benefits exceed the costs. One should ask: What were the benefits of introducing the policy? What were the potential costs at the time of implementation? </p>
<p>The central bank justified the <a href="https://theconversation.com/nigerias-currency-redesign-and-withdrawal-limits-questionable-policy-and-bad-timing-197813">redesign policy</a> as follows: to rein in counterfeiting, promote a cashless economy by limiting the amount of the new banknotes that can be withdrawn, reduce the large quantity of dirty notes circulating in the economy, discourage hoarding, curb crimes like kidnapping and terrorism, and head off illicit financial transactions. </p>
<p>It also saw the policy as a way of addressing the huge amount of currency outside the formal financial sector; 85% of banknotes circulate outside the banking system, largely because of hoarding and illicit financial transactions. </p>
<p>And the cost? If indeed the central bank considered the cost, it obviously underestimated it. How would anyone ignore the large-scale disruptions in the economy and loss of productivity that the policy caused, not to speak of the stress and anxiety inflicted on Nigerians? </p>
<p><strong>Communication:</strong> Of all the pitfalls that doomed the currency redesign policy, at least as conceived originally, the lack of effective communication about the overarching goals and modus operandi of the exercise was the most devastating. </p>
<p>Nigeria’s central bank threw a basic element of strategic planning and communication to the winds when it failed woefully to communicate and educate the public about expectations, prior to launching the policy. According to <a href="https://www.wilmingtonbiz.com/insights/dallas__romanowski/why_communication_is_essential_to_successful_planning/3175">strategic planners</a>, a major policy initiative that is not well communicated, from the top of the strategy planning pyramid to the bottom, is bound to fail.</p>
<p>The central bank should have sought the buy-in of major stakeholders, especially the National Economic Council and the National Assembly. The central bank would have had a better chance of avoiding the ferocious push-back it got. </p>
<p>The central bank finally began rolling out a <a href="https://www.arise.tv/cbn-intensifies-nationwide-awareness-on-redesigned-naira/">communication plan</a> by late December 2022. But this was too little too late. By then Nigerians had already characterised the policy as <a href="https://sunnewsonline.com/unending-pains-of-naira-redesign-policy/">decidedly punitive</a>. The <a href="https://www.thisdaylive.com/index.php/2023/02/14/between-naira-redesign-project-and-politicians-vested-interest/">narrative</a> that had gained ground was that the change was designed to curtail the ability of politicians to buy votes during the 2023 elections.</p>
<p>This inevitably raised the question of why millions of Nigerians should suffer because of politicians? </p>
<p>The central bank’s mishandling of communication was also manifested in the fact that it <a href="https://dailypost.ng/2023/03/07/naira-redesign-cbn-silence-keeps-banks-business-owners-in-confusion/">failed</a> to issue policy guidelines to commercial banks and the public days after the Supreme Court nullified the bank’s earlier deadline. This has exacerbated the <a href="https://guardian.ng/news/one-week-after-scourt-ruling-cbns-silence-stokes-confusion/">confusion</a> associated with the policy, as merchants and businesses continue to reject the old notes, despite the court’s rulings. </p>
<p><strong>Inappropriate timeframe:</strong> The timeframe for implementation was unrealistic and impracticable. By setting a very short timeframe for phasing out the old notes, the Central Bank of Nigeria appeared to have adopted textbook assumptions about how the Nigerian banking system works.</p>
<p>Anyone who has been to a typical commercial bank in Nigeria would know it would have been impossible for the banks to undertake the monumental task of collecting old notes and dispensing the new ones within the one-and-a-half month window originally allowed by the central bank. Overcrowding, chaos, excruciatingly slow service and unnecessary bureaucratic red tape are quite common during normal banking hours. It is not uncommon to observe people with “connection” circumvent queues and obtain preferential access to bank staff. Although Nigerian banks pride themselves as being digitised, a lot of paper-pushing still goes on within the banking system. </p>
<p>The central bank should have considered this fact and allowed for a longer timeframe for implementation.</p>
<p>There was also no persuasive rationale for the rushed implementation of the policy. Neither was the central bank able to explain why the old and new notes could not coexist, a measure the Supreme Court has now <a href="https://www.bbc.com/news/world-africa-64837041">mandated</a> the bank to implement. </p>
<p><strong>Conflicting goals and lack of prioritisation:</strong> Policy targeting is a major precondition for success. The focus on one unambiguous objective in past redesign policies enabled the central bank to conduct a seamless and less dramatic exercise. </p>
<p>The current redesign policy had too many goals, and it was unclear which one was the target goal.</p>
<p>Identifying target goals enables policy makers to select appropriate instruments for achieving those goals. But when there are too many goals, the danger is that an instrument designed for one goal may undermine another goal. </p>
<p>For instance, the goal of reining in money laundering and illicit financial transactions meant that the Central Bank of Nigeria needed to deliberately restrict access to the new banknotes. But this inflicted unintended hardships on innocent Nigerians who simply wanted to access their hard-earned money. </p>
<p>The central bank should have focused on one major goal. If the goal was to phase out old notes, as the bank is statutorily mandated to do, then the old and new notes could have circulated alongside each other until the old notes were phased out.</p>
<p>A casual announcement that new notes would be circulating from a given date would have been all that was needed. People would not have panicked and rushed to the banks to withdraw money. </p>
<p><strong>Economic headwinds:</strong> It is very difficult to implement a major policy initiative that negatively affects people during a period of macroeconomic instability. The central bank policy came at a bad time. Nigeria’s <a href="https://www.nigerianstat.gov.ng/">economy</a> is in a shambles, with a <a href="https://www.cbn.gov.ng/rates/inflrates.asp?year=2023">22%</a> inflation rate, <a href="https://www.statista.com/statistics/1119227/forecast-unemployment-rate-in-nigeria/#:%7E:text=In%202022%2C%20the%20unemployment%20rate,constantly%20in%20the%20past%20years.">33%</a> unemployment rate – <a href="https://www.nigerianstat.gov.ng/">43%</a> among young Nigerians – and a growth rate of <a href="https://www.imf.org/en/Countries/NGA">3%</a>. </p>
<p>These economic challenges have been compounded by a <a href="https://punchng.com/breaking-cbn-raises-interest-rate-to-17-5/">17.5%</a> interest rate, steep declines in the value of the Naira, and <a href="https://theconversation.com/nigerias-poverty-profile-is-grim-its-time-to-move-beyond-handouts-163302">widespread poverty</a>. </p>
<p>Nigerians’ tolerance for economic shocks was already at its limit when the redesign policy was launched. The policy and the confusion that accompanied it tipped them over the edge.</p>
<h2>The challenge of credibility</h2>
<p>The central bank needs to reestablish its credibility as the “people’s bank,” to reverse a self-inflicted image of an organisation that’s partisan. </p>
<p>The bank has a fiduciary responsibility of catering to the interests of its main “shareholder,” the Nigerian people. But the perception is that the bank lacks independence. To effectively discharge its statutory duties, the Central Bank of Nigeria should initiate a process of re-asserting its independence and regaining the people’s trust and confidence.</p><img src="https://counter.theconversation.com/content/201578/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Stephen Onyeiwu does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>There are at least five errors that marred the currency redesign policy of the Central Bank of Nigeria, most of which could have been avoided.Stephen Onyeiwu, Professor of Economics & Business, Allegheny CollegeLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1957942023-01-03T11:54:57Z2023-01-03T11:54:57ZAusterity has its own life – here’s how it lives on in future generations<figure><img src="https://images.theconversation.com/files/501860/original/file-20221219-14-3mfq8r.jpg?ixlib=rb-1.1.0&rect=16%2C0%2C5447%2C3637&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Financial worries stemming from austerity could span generations.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/worried-aged-mother-embracing-comforting-grown-1463151290">fizkes / Shutterstock</a></span></figcaption></figure><p>Austerity in the UK is here to stay. The Bank of England has warned that the country is facing the longest recession since records began, predicting that the economic slump will <a href="https://www.bankofengland.co.uk/monetary-policy-report/2022/november-2022">extend well into 2024</a>. At the same time, the most recent budget has been called austerity 2.0 by <a href="https://www.deloitteacademy.co.uk/node/4317">companies</a>, <a href="https://www.unison.org.uk/news/general-secretary-blog/2022/11/blog-the-government-paves-the-way-for-austerity-2-0/">unions</a>, <a href="https://www.london.gov.uk/media-centre/mayors-press-release/Mayor-accuses-Government-of-ushering-in-%E2%80%98Austerity-2.0%E2%80%99">political figures</a> and <a href="https://wbg.org.uk/analysis/uk-budget-assessments/misguided-plans-for-austerity-2-0-wbg-response-to-autumn-statement-2022/">policy experts</a>. This suggests the era of public spending cuts seen since 2010 has reached the next phase: austerity as the “<a href="https://www.ituc-csi.org/austerity-the-new-normal">new normal</a>”.</p>
<p><a href="https://www.theguardian.com/society/2020/mar/03/lost-decade-hidden-story-how-austerity-broke-britain">Austerity policies</a> implemented since 2010 have not been substantially reversed or retracted in recent years. In fact, they have often been levelled at the most marginalised social groups. </p>
<p>In 2019, cuts in total expenditure on welfare and benefit payments alone were expected to total <a href="https://journals.lwbooks.co.uk/soundings/vol-2019-issue-71/abstract-7603/">£37 billion a year by 2020</a>. And now, growing numbers of people in the UK are struggling with everyday costs of living, while a further <a href="https://www.theguardian.com/uk-news/2022/nov/17/uk-government-spending-where-the-cuts-will-fall">£28 billion</a> of cuts to public funding were announced in the government’s November 2022 budget.</p>
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Read more:
<a href="https://theconversation.com/autumn-statement-is-highly-political-compared-to-research-on-best-ways-to-fix-public-finances-195035">Autumn statement is highly political compared to research on 'best' ways to fix public finances</a>
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<p>All of this shows how keenly economic policies are <a href="https://journals.sagepub.com/doi/abs/10.1177/0309132518796280">felt in everyday life</a>, in the mundane: eating, heating, caring, shopping and travelling. And perpetual and cumulative cuts like those we have seen made in recent years to welfare, education, social and healthcare services shape daily lives and social relationships. The effects continue, across time and generations. They also worsen existing <a href="https://www.intersecting-inequalities.com/">inequalities</a> relating to <a href="https://journals.sagepub.com/doi/full/10.1057/fr.2014.42">gender</a>, race, class, age and disability.</p>
<p>My <a href="https://academic.oup.com/joeg/article/16/2/305/2413171">previous research</a> during the 2008-09 UK economic recession revealed how memories and intergenerational relationships are key to understanding what it means to get by in times of recession and crisis. For instance, upbringing, living through previous recessions, debt and hardship are central to how people respond to economic downturns. These experiences, family histories and memories are often shared across generations in a way that influences younger people about financial issues.</p>
<p>Policies that aim to tackle poverty and economic inequality need to go beyond a focus on “the household” because this is not the only (or even the predominant) framework for how social relationships are built. Instead, people live within and across households that intersect based on kinship, friendship, intimacy and more. These are the main mechanisms that people use to <a href="https://policy.bristoluniversitypress.co.uk/growing-up-and-getting-by">get by during difficult times</a>.</p>
<p>Further research shows how austerity can be experienced as a “<a href="https://rgs-ibg.onlinelibrary.wiley.com/doi/abs/10.1111/tran.12300">personal crisis</a>”, affecting the things people can do, afford and dream about, including having security at home and work. It even extends to whether or not people are able to make decisions about <a href="https://journals.sagepub.com/doi/full/10.1177/00380261221135753">having children</a>. Suffice it to say, economic policies have more than momentary effects, they ripple across people’s lives – and that of their children – even if their circumstances improve.</p>
<h2>A life of its own</h2>
<p>Taking this further, <a href="https://www.isrf.org/2022/02/23/the-social-life-of-crisis/">my latest research</a> shows how austerity policies also have their own life. In the UK, this started with the early dismantling of the welfare state alongside diminished investment in deprived and post-industrial areas from the 1980s onwards. <a href="https://journals.sagepub.com/doi/pdf/10.1177/0308518X17701729">These programmes</a> have <a href="https://equalitytrust.org.uk/scale-economic-inequality-uk">entrenched inequality in certain regions</a> of the UK. So, while the current era of austerity arose from the recession following the global financial crisis 14 years ago, it is more deeply embedded in certain parts of the country.</p>
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Read more:
<a href="https://theconversation.com/three-charts-that-explain-why-falling-living-standards-could-deepen-the-uks-north-south-divide-196088">Three charts that explain why falling living standards could deepen the UK's north-south divide</a>
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<p>We can get an idea of <a href="https://www.isrf.org/2022/02/23/the-social-life-of-crisis/">how austerity affects people’s daily lives</a> by listening to their stories. Yusuf, for example, spoke to me about the instabilities he currently faces at work and how that has affected his life choices. “There’s no job security or stability,” he says. “There’s not enough trade [as a mechanic] anymore like there used to be years ago.” As a result, Yusuf does not think he could afford to have children.</p>
<p>Employment opportunities and local industries across northern England (where my research was carried out), had already been hit hard by years of <a href="https://journals.sagepub.com/doi/full/10.1177/00380261221135753">local underinvestment</a>. But adding austerity to the mix meant these factors culminated in multi-faceted forms of insecurity and uncertainty for Yusuf. His lack of job security is then linked to being unable to afford to have children – a <a href="https://www.tandfonline.com/doi/full/10.1080/01459740.2021.1951261">different life</a> to the one he had imagined.</p>
<p>Even if austerity cuts were reversed today, the long-term effects for Yusuf and countless others could continue for generations. Economic policies should be implemented alongside forecasts of what their effects will be for future generations. Researching these future outcomes, as well as past and current experiences, will highlight the unevenness of austerity measures. This will help to ensure that austerity policies and the devastation they cause do not become normalised, condemning many more generations to their long-term negative effects.</p><img src="https://counter.theconversation.com/content/195794/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sarah Marie Hall receives funding from UKRI and the Independent Social Research Foundation.</span></em></p>Public spending cuts and the soaring cost of living will not only affect people lives now, but could trickle down through generations.Sarah Marie Hall, Professor in Human Geography, University of ManchesterLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1950352022-11-21T16:47:43Z2022-11-21T16:47:43ZAutumn statement is highly political compared to research on ‘best’ ways to fix public finances<p>The UK faces some significant belt-tightening following Chancellor Jeremy Hunt’s autumn statement, which announced spending reductions and tax rises of around £55 billion. Much research has been done into the best ways to do fiscal austerity in terms of reducing debt, avoiding economic damage and not exacerbating inequality. So how does this attempt measure up?</p>
<p>That £55 billion retrenchment includes <a href="https://obr.uk/docs/dlm_uploads/CCS0822661240-002_SECURE_OBR_EFO_November_2022_WEB_ACCESSIBLE.pdf">over £30 billion</a> of reduced annual government spending by 2027/28. Over the next couple of years, the government is actually going stick to previous spending plans and even increase them for core departments like health and social care. But from 2025-28 there will be a crackdown, with maximum 1% real-terms increases for day-to-day (current) spending, and infrastructure (capital) spending only being maintained in cash terms. </p>
<p><a href="https://academic.oup.com/oep/article-abstract/73/1/317/5612127?redirectedFrom=fulltext">Our research</a><a href="https://academic.oup.com/oep/article-abstract/73/1/317/5612127?redirectedFrom=fulltext"></a>, which looked at the US finances between 1985 and 2016 but is applicable to many countries, has found that austerity based on public spending cuts often costs the overall economy less than tax rises. Spending cuts are usually followed by reduced interest rates, which can spur consumption and business investment. </p>
<p><a href="https://dash.harvard.edu/handle/1/2579822">Previous findings</a> based on data around the world <a href="https://academic.oup.com/economicpolicy/article-abstract/10/21/205/2392283">dating back</a> as far back as the 1960s have reached similar conclusions. In contrast, tax rises disincentivise consumption and investment by whoever is on the receiving end of them. </p>
<p>Having said that, cuts to capital spending weaken the overall economy longer term by making a country less productive. Unfortunately, governments tend to see this as more appealing than immediately unpopular cuts to current spending. Nearly half of Hunt’s spending cuts fall into this category. </p>
<figure>
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<p>Even if the government had cut spending in the “right” way, there’s still an ugly trade off. <a href="https://academic.oup.com/oep/article-abstract/73/1/317/5612127?redirectedFrom=fulltext">Our research</a> suggests that spending cuts are associated with greater income inequality than tax rises, disproportionately affecting those on lower incomes. </p>
<p>The most obvious example is the UK’s early 2010s fiscal austerity, which caused a <a href="https://www-cdn.oxfam.org/s3fs-public/file_attachments/cs-true-cost-austerity-inequality-uk-120913-en_0.pdf">clear rise</a> in both absolute and relative poverty. The government may again be calculating that it takes a while for people to see the effects, thereby minimising the political cost in the short term. </p>
<h2>The tax situation</h2>
<p>The chancellor’s austerity package also entails measures that will increase taxes as a proportion to GDP to over 37% by 2023/24. Historically this figure has averaged 32% since 1948. </p>
<p>The rise will partly come from maintaining the corporation tax increase announced when Rishi Sunak was chancellor, plus increasing windfall taxes on energy companies. Income tax thresholds are also being frozen so that over time, more people will pay the 20% and 40% basic and higher rates than at present, while the top 45% rate will kick in at £125,000 instead of £150,000. </p>
<p>Tax hikes do more harm than spending cuts to GDP in the long run because they distort the economy. For example, higher taxes on company profits lead to higher prices for goods. This reduces the incentive for households to invest indirectly in firms by buying as many of their goods, which weakens business investment and so on. </p>
<p>On the other hand, governments can enhance <a href="https://www.jstor.org/stable/30026356">their political credibility</a> by taking a tough decision, particularly when it goes against the instincts of the ruling party. The Conservatives choosing to raise corporation taxes from 19% to 25% by April 2023 as opposed to, say, rowing back on the Sizewell C nuclear power plant or the HS2 rail project, would certainly be an example. </p>
<p>The government could arguably have gone further here by, say, making tougher changes to capital gains tax or inheritance tax. Admittedly, however, it is difficult to win a great deal of political credibility when your party is <a href="https://www.markpack.org.uk/155623/voting-intention-opinion-poll-scorecard/">so low</a> in the polls already. </p>
<h2>Debt</h2>
<p>As it stands, the government’s Office for Budget Responsibility (OBR) forecasts that total UK public debt will rise from 102% of GDP in 2022/23 to 107% the following year, before easing to 99% by 2027/28. But if the autumn statement is to reduce the national debt, tax revenues will have to improve considerably. Is this likely?</p>
<p>The income tax changes will raise the average marginal tax rate in the UK, meaning the tax paid on the next £1 of income. <a href="https://www.researchgate.net/publication/350581381_The_impact_of_income_tax_changes_on_government_revenue_moving_beyond_the_Laffer_curve">Our research</a> demonstrates that tax rises that increase this marginal rate raise less revenue as they disincentivise high-income earners. </p>
<p><strong>UK debt as a % GDP since 1921</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/496489/original/file-20221121-12-ojrex7.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/496489/original/file-20221121-12-ojrex7.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/496489/original/file-20221121-12-ojrex7.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=368&fit=crop&dpr=1 600w, https://images.theconversation.com/files/496489/original/file-20221121-12-ojrex7.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=368&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/496489/original/file-20221121-12-ojrex7.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=368&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/496489/original/file-20221121-12-ojrex7.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=462&fit=crop&dpr=1 754w, https://images.theconversation.com/files/496489/original/file-20221121-12-ojrex7.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=462&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/496489/original/file-20221121-12-ojrex7.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=462&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><a class="source" href="https://www.statista.com/statistics/282841/debt-as-gdp-uk/">Statista</a></span>
</figcaption>
</figure>
<p>When combined with the OBR <a href="https://obr.uk/box/fiscal-multipliers/">under-forecasting the impact of taxes on the economy</a> relative to <a href="https://www.aeaweb.org/articles?id=10.1257/jep.33.2.89">the existing empirical evidence</a>, we suspect that its tax revenue forecasts are overstated.</p>
<p>Of course, this may be offset by an understatement on inflation. The OBR is assuming very low inflation from 2024, but there are <a href="https://www.wsj.com/articles/inflation-high-forecast-economist-goodhart-cpi-11646837755">various reasons</a> why it could come in much higher. If so, that would reduce the real cost of the debt by more than the OBR anticipates. </p>
<p>Meanwhile, it does not help that the government has maintained the <a href="https://www.bbc.co.uk/news/business-53082530">“triple lock” on pensions</a>, which stipulates that the state pension will increase each year in line with whichever is the highest out of consumer price inflation, average wage increases or 2.5%. With the UK’s ageing population, the <a href="https://theconversation.com/how-to-fix-the-pensions-triple-lock-but-still-protect-pensioners-from-high-inflation-186611">OBR forecasts</a> that the triple lock will help increase state-pension spending from 5% to 8% of national income over the next 50 years. Prolonging the triple lock again suggests putting politics ahead of what’s best for the economy. </p>
<h2>Playing politics</h2>
<p>Overall, retrenching the public finances means balancing numerous trade-offs delicately to have any realistic chance of reducing debt reduction, economic stability and avoiding higher inequality. </p>
<p>By both cutting spending and raising taxes, the chancellor has designed a relatively balanced package. However, there is clearly an aversion to taking difficult decisions, including pushing back spending reductions until 2025-28, prioritising cuts in capital spending and protecting the pensions triple lock. </p>
<p>In the same vein, the tax changes will increase the average marginal tax rate slowly as incomes rise. This is consistent with the <a href="https://www.conservatives.com/our-plan">Conservative 2019 manifesto</a> pledge not to increase tax rates, but it will discourage work and investment, further undermining long-term productivity. </p>
<p>It goes to show that even during an economic crisis, the UK government’s instincts are still to make highly political decisions.</p><img src="https://counter.theconversation.com/content/195035/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Cutting infrastructure spending and maintaining the pensions triple lock are among the questionable moves in Jeremy Hunt’s statement.Gulcin Ozkan, Professor of Finance, King's College LondonDawid Trzeciakiewicz, Lecturer in Economics, Loughborough UniversityRichard McManus, Director of Research Development/Reader in Macroeconomic Policy, Canterbury Christ Church UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1946582022-11-21T16:00:47Z2022-11-21T16:00:47ZGovernment debt won’t necessarily burden future generations – but austerity will<figure><img src="https://images.theconversation.com/files/496462/original/file-20221121-22-9n2a0v.jpg?ixlib=rb-1.1.0&rect=671%2C0%2C4792%2C3637&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/close-lonely-little-girl-hugging-toy-2161711363">Family stock / Shutterstock</a></span></figcaption></figure><p>In his <a href="https://www.gov.uk/government/speeches/the-autumn-statement-2022-speech">autumn budget statement</a>, Chancellor Jeremy Hunt said that the Conservatives don’t leave debts for the next generation. As such, he <a href="https://theconversation.com/autumn-statement-2022-experts-react-194829">vowed to halve</a> government borrowing over the next five years.</p>
<p>This promise is key to the government’s justification for austerity, spending cuts and other unpopular policies. Hunt is appealing to the commonly held idea that high levels of national debt unfairly burden the next generation – we betray our children and grandchildren by taking on too much debt, leaving them worse off and saddled with the costs after we are gone.</p>
<p>But this view of public debt is incomplete. In a <a href="https://journals.sagepub.com/doi/full/10.1177/00323217211040210">recent article</a>, I outline when long-term debt wrongs our successors and when it does not. </p>
<p>Unlike private debts, where debts are in the deceased’s name only, public debt can be passed on to future generations. But the fact that some costs of national debt can be transferred does not imply that these generations are worse off. Whether the loan has been spent wisely or foolishly is significant. </p>
<p>If borrowed funds are spent on a short-term project (for example, investing in an enormous fireworks display) and some of the costs are transferred to the future, the future generation will probably be worse off as a result of the loan. However, if the funds are spent on a project whose benefits extend to future generations (for example, the war to end all wars), then even if succeeding generations incur some of the debt, they may be much better off overall. </p>
<p>Investment in public projects can improve the position of future generations. National debt can be used to finance investments in education, the labour market, and tackling the harmful effects of climate change that will benefit the young. Given the time pressures, this last option will not be available to future generations to handle themselves. </p>
<p>The view of debt as burdening the future loses sight of the fact that governments borrow money to invest in productive things. It is important that we don’t just focus on where the costs fall over time, but also where the benefits will fall. If borrowing for our children and grandchildren will improve their overall wellbeing and prevent future harm, it would be negligent not to help when we have the chance. </p>
<h2>The real burden</h2>
<p>The government’s position is that we need to reduce national debt through tax increases and spending cuts so we don’t impose costs on future generations. But it is awkward for the government to invoke “protecting the young” to justify austerity. When governments cut spending on essential things like education, social security and public services, it is younger generations that suffer the most. </p>
<p>In 2019, the UN <a href="https://www.ohchr.org/en/press-releases/2019/05/un-expert-laments-uks-doubling-down-failed-anti-poor-policies">blamed the UK’s “austerity experiment”</a> for forcing millions of people into poverty, causing record levels of hunger, homelessness and decreased life expectancy for some. This was before the pandemic. And things have only deteriorated, particularly for young people.</p>
<p>The UK is one of the richest countries in the world, yet it has high levels of childhood poverty. Children are already burdened in education due to COVID disruptions. According to teachers, hunger is now one of the <a href="https://www.nasuwt.org.uk/article-listing/cost-of-living-crisis-harming-pupils-education.html">biggest challenges in the classroom</a>. The use of food banks has risen by 81% in the last five years. Trussell Trust has distributed 2.1 million emergency food parcels this year, with 832,000 going to children. To make matters worse, more than 400,000 children in the UK <a href="https://buttleuk.org/our-research/research-reports/the-real-face-of-child-poverty-in-the-uk-in-2017/">do not have a bed</a>. Primary school teachers are now raising money to provide bed bundles because their pupils are suffering from <a href="https://zarach.org/">sleep deprivation</a>. Although the government is pledging to increase school spending by <a href="https://schoolsweek.co.uk/autumn-statement-2-3-billion-extra-for-schools/">£2.3 billion per year</a>, the worry is that with rising energy bills and inflation it is not enough money for schools to make ends meet and feed children in their care.</p>
<figure class="align-center ">
<img alt="Two young children holding hands and running in a sunny field in front of wind turbines" src="https://images.theconversation.com/files/496461/original/file-20221121-16-ffo75k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/496461/original/file-20221121-16-ffo75k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=313&fit=crop&dpr=1 600w, https://images.theconversation.com/files/496461/original/file-20221121-16-ffo75k.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=313&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/496461/original/file-20221121-16-ffo75k.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=313&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/496461/original/file-20221121-16-ffo75k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=393&fit=crop&dpr=1 754w, https://images.theconversation.com/files/496461/original/file-20221121-16-ffo75k.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=393&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/496461/original/file-20221121-16-ffo75k.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=393&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Money can be invested in long-term projects like education and fighting climate change.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/little-girl-boy-running-front-windmills-1827204890">Sharomka / Shutterstock</a></span>
</figcaption>
</figure>
<p>Austerity and government spending cuts risk pushing the economy into <a href="https://heinonline.org/HOL/Page?handle=hein.journals/jrlsasw41&div=23&g_sent=1&casa_token=-3xaQpNkJ2MAAAAA:FGoRk7vKHBISNU1bbQ8ACEIpB8sr05M0bIcZXfiGBaLkFqyJK6KvBSrTHtnV5T_pKedOYllliw&collection=journals">deeper recession</a> and increasing unemployment. Young working adults are already <a href="https://data.oecd.org/unemp/youth-unemployment-rate.htm">more vulnerable</a> to unemployment than their middle-aged peers, and the gap generally worsens after a financial crisis or during a recession. Young people in the UK were hit disproportionately hard by the last round of austerity policies – youth unemployment was <a href="https://www.jrf.org.uk/report/monitoring-poverty-and-social-exclusion-2014">four times higher</a> than for older age groups. </p>
<p>Early experiences of unemployment increase the risks of further unemployment over a person’s lifetime. More young adults are being forced to accept jobs that are low paid and demeaning. Young people become scarred by this early experience and they become stuck in a <a href="https://academic.oup.com/ej/article-abstract/111/475/F577/5139983?redirectedFrom=fulltext">cycle of precarious contracts</a>.</p>
<p>The damage to young people’s health, education and employment opportunities will extend long into the future. If increasing public debt is wrong because it unfairly burdens the next generation, it is difficult to justify austerity. We will be creating or preserving the very conditions we seek to diminish.</p><img src="https://counter.theconversation.com/content/194658/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Nicola Mulkeen does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Used wisely, public debt could be a way to improve things for our children and grandchildren.Nicola Mulkeen, Lecturer in Political Philosophy, Newcastle UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1948702022-11-18T13:57:22Z2022-11-18T13:57:22ZAutumn statement 2022: what Sunak’s first big announcement tells us about how he will lead the country<p>Understandably, much of the focus on the autumn statement – the plan for the UK’s finances outlined by chancellor Jeremy Hunt on November 17 – is on its economic impact. But all economic policy making has considerable political significance. </p>
<p>The statement is the first major policy event of the Sunak government and it provides important pointers to the direction he intends to lead the country. What is also clear is that the statement creates considerable political and economic risks for his government in terms of internal party and electoral politics. So what can we take away from the statement to understand the leadership and ideas of the Sunak premiership?</p>
<p>The autumn statement <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1118417/CCS1022065440-001_SECURE_HMT_Autumn_Statement_November_2022_Web_accessible__1_.pdf">highlights</a> the political and economic difficulties that the government faces. The current outlook is not healthy, with Chancellor Jeremy Hunt confirming the UK is entering a recession. The Office for Budget Responsibility <a href="https://obr.uk/docs/dlm_uploads/CCS0822661240-002_CCS001_SECURE_OBR_EFO_November_2022_BOOKMARK.pdf">reports</a> that living standards are shrinking – potentially by 7% over two years – and the economy faces sustained high levels of inflation. The government has to attempt restore the confidence of the international financial markets in its standing. At the same time, it needs to secure the support of voters facing lower living standards and poor public services.</p>
<p>In this context, the autumn statement is an attempt to weave a path between the failed economic dogmatism of the short-lived government of Liz Truss and the wild promises of the Boris Johnson years. Over the last decade, the centre of gravity within the Conservative party has notably shifted to the right. Electoral pragmatism means that Sunak, a fiscally-dry Conservative, cannot go headfirst down the low tax, small state road in the manner Truss wanted.</p>
<h2>Balancing act</h2>
<p>Instead, Sunak and Hunt have sought to strike a delicate balancing act between what markets will accept and voters will put up with. They have focused on addressing the fiscal <a href="https://www.bbc.co.uk/news/uk-politics-63465935">black hole</a> by raising taxes but at the same time have tried to maintain current spending commitments, notwithstanding this <a href="https://theconversation.com/autumn-statement-2022-experts-react-194829">translating</a> into actual cuts due to inflation.</p>
<p>Concessions have been made for important constituencies, with commitments to health, education, pensions and universal credit despite an overall real-terms decline in public spending. In the context of high inflation and considerable wage pressure, it is likely that all services will continue to feel real pressure. </p>
<p>The government will continue to face political pressure to spend more. Widespread industrial action and the threat of a modern-day winter of discontent, this time on a Conservative watch, have not disappeared.</p>
<p>Additionally, there is a growing body of evidence and increasing chorus of voices from business and elsewhere, <a href="https://www.theguardian.com/business/live/2022/nov/14/joules-administrators-cost-of-living-business-confidence-recession-rightmove-business-live">arguing</a> that Brexit has damaged the UK economy and is partially responsible for the current economic malaise. The autumn statement is based on continuing to downplay a “Brexit effect” on UK economic performance. </p>
<p>The Sunak vision of a post-Brexit political economy is closer to Johnson than Truss. The new prime minister appears committed to Johnson’s “levelling up” agenda (though with considerably reduced resources and a very significant cut in spending post-2024). He also seems to recognise that spending on research and development in key areas will drive innovation in the economy. </p>
<p>So this is neither a completely free market or interventionist approach to growing the economy. It is one where public spending is creating incentives to innovate and to drive market growth. At the same time, there is no joined-up attempt to address the supply side problems created by leaving the European single market or the war in Ukraine with policies that will reshape Britain’s post-Brexit economy.</p>
<h2>Electoral pressures</h2>
<p>Sunak has focused on maintaining the Johnson electoral coalition, but risks angering those affected by tax rises, alongside those on the right of his party. A number of MPs are already highly critical of tax increases, extra public spending and commitments to low carbon energy. A real danger for Sunak is that in attempting to broaden his government’s electoral appeal, he fails to resolve the fundamental divisions within his party between those committed to Truss’s radicalism and those who favour a more pragmatic approach.</p>
<p>The statement has also set an elephant trap for Labour. By delaying £30 billion in spending cuts until after the 2025 election, Labour is going to face difficult questions in the campaign lead-up about its spending plans. Will it reverse tax cuts and reduce public spending or will it need further tax increases to improve public services? Labour is in danger of being tied into Conservative commitments, which will limit its options.</p>
<p>The approach set out in the autumn statement by Jeremy Hunt is somewhat different to that offered by Sunak during last summer’s Conservative party leadership campaign. Then, he presented himself as a low tax, small state supporter. Today this vision is hampered both by the need to show economic competence to the markets and to improve public services in order to meet voter expectations. </p>
<p>The commitment to fiscal conservatism is a difficult political space in such circumstances. It has limited the number of tools available to him to unite the Conservative party and to build the electoral coalition necessary to win the next election. It may also mean that he ends up being the third Conservative prime minister to fail to put in place a convincing vision of what a post-Brexit United Kingdom should be.</p><img src="https://counter.theconversation.com/content/194870/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Martin Smith receives funding from the Nuffield Foundation</span></em></p><p class="fine-print"><em><span>Dave Richards receives funding from The Nuffield Foundation and the ESRC</span></em></p><p class="fine-print"><em><span>Sam Warner receives funding from the Nuffield Foundation</span></em></p>With an election ahead and finances stretched to capacity, the prime minister has a difficult balancing act to strike.Martin Smith, Anniversary Professor of Politics, University of YorkDave Richards, Professor of Public Policy, University of ManchesterSam Warner, Postdoctoral research associate, University of ManchesterLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1920332022-10-06T13:57:45Z2022-10-06T13:57:45ZAusterity led to twice as many excess UK deaths as previously thought – here’s what that means for future cuts<p>Cuts to public services and living standards across Britain from 2010 contributed to 335,000 excess deaths – twice as many as previously thought, according to new research. These austerity measures were introduced by the coalition government elected into office that year, partly in response to the banking crash of 2008.</p>
<p>Previous estimates had suggested that <a href="https://bmjopen.bmj.com/content/7/11/e017722">152,000</a> people died prematurely between 2015 and 2019 due to <a href="https://theconversation.com/austerity-was-necessary-in-2010-but-we-dont-need-much-more-37939">austerity</a>. The <a href="https://jech.bmj.com/content/jech/early/2022/09/26/jech-2022-219645.full.pdf">new study</a>, conducted by researchers at the University of Glasgow and the Glasgow Centre for Population Health and published in the Journal of Epidemiology and Community Health, suggests this was an underestimate and also suggests that austerity had a growing effect over time. </p>
<p>These findings are troubling for several reasons. They suggest that men were much more affected than <a href="https://www.dannydorling.org/?page_id=3970">we first thought</a>. Furthermore, the UK government now plans to embark on a <a href="https://www.theguardian.com/commentisfree/2022/oct/04/liz-truss-kwasi-kwarteng-chancellor-u-turn-tax-cuts-public-services-benefits">new round</a> of very large public spending cuts. Against this backdrop, these new numbers of excess deaths linked to a previous period of stringent public spending cuts <a href="https://conservativehome.com/2022/10/03/our-survey-over-two-in-five-party-members-want-spending-cuts-as-well-as-tax-cuts-not-more-borrowing/">can give us an idea</a> of what might lie ahead this time round too.</p>
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<p>There were actual <a href="https://academic.oup.com/bmb/article/133/1/4/5812717">overall falls</a> in UK life expectancy between 2014 and 2018, with large falls for particular groups such as the poorest tenth of the population, although the health of people living in the best-off areas continued to improve. Previous <a href="https://www.gov.uk/government/publications/recent-trends-in-mortality-in-england-review-and-data-packs">suggestions</a> that flu or particularly cold winters might have been key reasons don’t stand up to scrutiny, given that, during this period, there was neither an unusual flu outbreak nor any notably cold winter.</p>
<p>Before this new study, some disputed the idea that austerity could be blamed for the increase in deaths by pointing out that most of those who had died prematurely were old and so had benefited from the <a href="https://www.unbiased.co.uk/life/pensions-retirement/what-is-the-triple-lock-pension-and-how-does-it-affect-me">“triple lock”</a> of the UK state pension. </p>
<p>This safeguarding mechanism was introduced in 2010 to ensure that pensions would rise by the highest of inflation, earnings growth, or 2.5% a year. In theory this meant that pensioners – the over-66s – were sheltered from the effects of austerity. Sadly, that was not true. </p>
<p>Between 2010 and 2020 the average UK pensioner saw their real-terms weekly income (after housing costs) rise by only £12, to £331 a week. That represents a meagre 3.8% rise <a href="https://www.gov.uk/government/statistics/pensioners-incomes-series-financial-year-2019-to-2020/pensioners-incomes-series-financial-year-2019-to-2020">over the whole decade</a>, which works out to £1.71 extra per day. This in no way compensates for rising fuel and other costs that <a href="https://news.sky.com/story/state-pensioners-set-to-be-left-with-just-11-a-day-from-april-as-energy-bills-soar-12684106">especially hurt</a> poorer pensioners. </p>
<p>The overall rise in weekly income was this small because other state benefits that pensioners received, and relied upon to ensure they could cope, were reduced in real terms. For example the proportion of pensioners receiving disability payments <a href="https://www.gov.uk/government/statistics/pensioners-incomes-series-financial-year-2019-to-2020/pensioners-incomes-series-financial-year-2019-to-2020#sources-of-pensioner-incomes">fell from 23% to 19%</a> between 2010 and 2020. </p>
<p>Poorer pensioners and those in most need were also most harmed by cuts to state services. They lost their adult social worker and carer visits, local government help, and so much else that existed in 2010 – but was largely gone by 2019.</p>
<p>It is now becoming clear that far more people died prematurely due to the direct and indirect effects of austerity and government policy than we had at first believed to be the case. In international comparisons, only in the UK and US were the cuts as bad and <a href="https://www.bmj.com/content/362/bmj.k2562">their impacts on health and wellbeing</a> so sustained. </p>
<p>Government policy in the US <a href="https://www.cnbc.com/2021/10/26/social-security-what-a-new-plan-in-congress-would-mean-for-benefits.html">has changed</a> since the election of Joe Biden and his taking office in January 2021. The UK, by contrast, has moved in the opposite direction. </p>
<p>Data reporter John Burn-Murdoch <a href="https://www.ft.com/content/d5f1d564-8c08-4711-b11d-9c6c7759f2b8">recently argued</a> that, in adopting what might well be “the most extreme economic position of any major party in the developed world”, Liz Truss’s Conservative government has “become unmoored from the British people.” </p>
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<p>More people in Britain died due to austerity in the five years before the pandemic, than died from COVID-19 in the first three years of the pandemic. The effects of austerity continued after the pandemic hit, but initially became harder to discern. </p>
<p>However, in August 2022 the Financial Times <a href="https://www.ft.com/content/f36c5daa-9c14-4a92-9136-19b26508b9d2">published</a> estimates suggesting a large proportion of recent non-COVID-related deaths could be ascribed to just one aspect of austerity: waiting over 12 hours to be seen in accident and emergency departments.</p>
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<p>The pandemic has not gone away. Cases are <a href="https://www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/conditionsanddiseases/articles/coronaviruscovid19latestinsights/infections">rising again</a>. So too are austerity-related deaths. </p>
<p>Most worrying is the coming winter. The last time the UK suffered a <a href="https://www.theguardian.com/business/2022/aug/14/house-freezing-life-blackouts-1970s-britain">similar energy crisis</a> was during Edward Heath’s term of office (1970-1974). That was also the last time a prime minster in Britain came into office upon winning a general election and left it on losing one. </p>
<p>Today, despite all the deaths from austerity and the pandemic, the UK has a far <a href="https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/ageing/bulletins/estimatesoftheveryoldincludingcentenarians/2002to2020">larger elderly and frail population</a> than it did in the early 1970s. That decade was characterised by much greater social solidarity and income and wealth inequalities were at an <a href="https://www.dannydorling.org/books/onepercent/Material_files/Media/Figure0-1/Figure0-1.jpg">all-time low</a>. Life expectancy never fell or even slowed in its rise, <a href="https://themanc.com/news/significant-risk-of-uk-gas-shortages-this-winter-regulator-warns/">despite rising heating costs and power cuts</a>. </p>
<p>The situation we face now is more akin the 1930s. Then, we were <a href="https://www.dannydorling.org/books/newsocialatlasofbritain/">as unequal as today</a>. Mortality rates were very high in poorer areas. Most people were poor. There were few average areas. And the very wealthy were protected by their wealth.</p><img src="https://counter.theconversation.com/content/192033/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Danny Dorling does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>More people died from the austerity in the five years before the pandemic than have died from COVID since.Danny Dorling, Halford Mackinder Professor of Geography, University of OxfordLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1883022022-08-10T14:35:40Z2022-08-10T14:35:40ZWhen the IMF comes to town: why they visit and what to watch out for<figure><img src="https://images.theconversation.com/files/478088/original/file-20220808-22-qapske.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Kristalina Georgieva, the Managing Director of the International Monetary Fund, speaking in Senegal in 2019. </span> <span class="attribution"><span class="source">Photo by Seyllou/AFP via Getty Images</span></span></figcaption></figure><iframe id="noa-web-audio-player" style="border: none" src="https://embed-player.newsoveraudio.com/v4?key=x84olp&id=https://theconversation.com/when-the-imf-comes-to-town-why-they-visit-and-what-to-watch-out-for-188302&bgColor=F5F5F5&color=D8352A&playColor=D8352A" width="100%" height="110px"></iframe>
<p>In most rich countries the news that a mission from the International Monetary Fund (IMF) is coming to visit is met with indifference. But, in most African countries the news can cause great consternation. </p>
<p>Why the difference?</p>
<p>History has a lot to do with it. The citizens of many African countries have suffered through their governments, under IMF pressure, cutting subsidies and social spending, firing public sector workers and increasing taxes. For example, a <a href="https://www.oxfam.org/en/press-releases/imf-must-abandon-demands-austerity-cost-living-crisis-drives-hunger-and-poverty">2021 Oxfam study</a>, found that the IMF encouraged 33 African countries to adopt austerity policies in the wake of the COVID pandemic. </p>
<p>On the other hand, with a few exceptions, <a href="https://www.project-syndicate.org/commentary/imf-grexit-help-by-arvind-subramanian-2015-08?utm_term=&utm_campaign=&utm_source=adwords&utm_medium=ppc&hsa_acc=1220154768&hsa_cam=12374283753&hsa_grp=117511853986&hsa_ad=499567080219&hsa_src=g&hsa_tgt=aud-1249316001597%3Adsa-19959388920&hsa_kw=&hsa_mt=&hsa_net=adwords&hsa_ver=3&gclid=CjwKCAjw6MKXBhA5EiwANWLODEhCxGybNz8HRf-qI8JRu3lL3L1cDewSi_WcPpZLHtaBGcbFMJWtThoCWQoQAvD_BwE&barrier=accesspay">such as Greece</a>, citizens of rich countries have not experienced the IMF having any direct impact on their lives.</p>
<p>Another important reason is lack of knowledge. Usually, when the IMF comes to town, the public gets little information about the purpose of the IMF’s visit – or its likely outcomes. In other cases, people are concerned that they have limited ability to influence the outcome of the visit or its impact on their lives.</p>
<p>This article seeks to remove some of the mystery surrounding IMF visits to a country. It explains the two basic reasons for the IMF sending its staff on “missions” to a country. And what can be expected in each case.</p>
<h2>The IMF’s remit</h2>
<p>According to its <a href="https://www.imf.org/external/pubs/ft/aa/pdf/aa.pdf">Articles of Agreement</a>, the IMF’s purposes include promoting monetary cooperation among its 190 member states so that they can more sustainably manage their macroeconomic situations and their international financial relations. This should help them promote and maintain high levels of employment and real income and develop their productive resources. </p>
<p>The IMF also provides financing to countries that do not have sufficient foreign exchange to meet all their needs and obligations so they do not have to resort to measures that are destructive of “national or international prosperity”. </p>
<p>To fulfil these responsibilities, the IMF sends its staff on two basic types of missions to member countries.</p>
<h2>Surveillance missions</h2>
<p>The first are <a href="https://www.imf.org/external/about/econsurv.htm">surveillance missions</a>. <a href="https://www.imf.org/external/pubs/ft/aa/pdf/aa.pdf">Article IV</a> says that the IMF should exercise “firm surveillance” over the efforts of its member states to try and direct their economic and financial policies towards the objective of fostering orderly economic growth with reasonable price stability. </p>
<p>Thus, the IMF regularly – usually annually – sends a staff team to assess the state of each country’s macro economy, the risks it faces and its capacity to continue evolving in a sustainable way. This team usually meets with officials in each country’s ministry of finance and central bank. In addition, they can ask to meet other government officials. For example, during COVID, the IMF might have been interested in meeting with health department officials. </p>
<p>The IMF staff will also normally meet with members of parliament and with representatives of business and labour. They may also meet with representatives of civil society.</p>
<p>There are four important points to note about these missions.</p>
<p>First, while the IMF provides some guidance to its staff, it does not require them to follow any particular procedures for informing interested parties that it is visiting the country. The result is that it’s difficult for anybody interested in the visit to learn how they might engage with the mission or provide it with information.</p>
<p>Second, in principle, there is no limit on what issues the IMF can focus on during its mission. Consequently, IMF staff can raise any issue and request whatever information they think is relevant to assessing the state of the country’s macroeconomic situation. This has led to a gradual expansion in the range of issues the IMF may raise in these missions. They now range from fiscal policy, inflation and unemployment rates, and balance of payments deficits to issues about how the country is dealing with climate change, gender discrimination, public health and wealth inequality. </p>
<p>Third, the outcome of the mission is a report prepared by the staff that is discussed by the IMF’s Board of Executive Directors. The report is usually made public after the discussion, together with a press release. </p>
<p>The IMF also uses the information in preparing its reports on the global economy.</p>
<p>Fourth, the IMF can make recommendations to the government on actions that it should take to deal with any challenges that have been identified.</p>
<p>These recommendations are purely advisory. In principle, the country is free to ignore them. This may be the case if the country is confident that it will not need IMF financing in the future. This is the reason that the citizens of rich countries do not usually care that an IMF mission is visiting their countries. However, this is a luxury that a country cannot afford if it thinks it may need IMF financial support. Or that its access to international financial markets may be influenced by the IMF’s view. This, of course, is the case for most African countries. </p>
<h2>Financing missions</h2>
<p>The second type of mission is initiated by requests for IMF financing. </p>
<p>Their purpose is to assess the country’s need for financial support. And to negotiate the terms on which it will be provided.</p>
<p>The IMF effectively acts as a lender of last resort. Consequently, governments are reluctant to ask for IMF financing unless they cannot get enough foreign exchange from other sources. </p>
<p>The IMF provides the financing on an unsecured basis. It tries to ensure that it will be repaid by making the financing subject to policy conditions, known as conditionalities. The premise of these conditionalities is that the country is essentially living beyond its means and must reduce its expenditures to the level of its income, including the funds contributed by the IMF. In short, the IMF is demanding that the country makes sacrifices. </p>
<p>This means, inevitably, that the terms of IMF financing are controversial. First, the scale of the sacrifices necessary to restore a country to macroeconomic health are not easily determined. They depend on perceptions of the causes of the country’s crisis, assumptions about future economic developments and the capacity of the government to implement policy changes and the public to accept and absorb these changes. Reasonable people can, of course, have different views on these issues. </p>
<p>Second, the scope, terms and number of conditionalities the IMF chooses to attach to its financing can be very broad, or quite specific. For example, it can merely state the size of budget cuts that the country must make or the amount of additional revenues it must raise and then leave it up to the country to decide how to meet these conditions. Alternatively, it can specify which budget items should be cut, which taxes should be increased, and which structural reforms must be implemented in order to get IMF financing.</p>
<p>This effectively means that the conditionalities are matters for negotiation between the government and the IMF and that they depend on the balance of bargaining power between them. This means that the IMF is effectively a player in the domestic economic policy making process of countries that need its financing. </p>
<p>However, the IMF is not subject to the same legal requirements regarding participation or transparency as other players in this process. It is also less accountable to those who will be affected by its policy choices than the government itself.</p><img src="https://counter.theconversation.com/content/188302/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Danny Bradlow's SARCHI chair is funded by the National Research Foundation. He also receives funding from the Open Society Initiative for Southern Africa or unrelated projects.</span></em></p>The IMF sends its staff on two types of mission to member countries: to assess the state of the country’s macro economy or to assess the need for financial support.Danny Bradlow, SARCHI Professor of International Development Law and African Economic Relations, University of PretoriaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1872982022-07-27T17:10:20Z2022-07-27T17:10:20ZLondon 2012’s legacy boosted Paralympic sport, but disabled people’s lives have worsened<p>Ten years ago, London hosted the Summer Olympic and Paralympic Games. For London 2012 planners, a central aim was that this mega-event would change the way non-disabled people – and society at large – see disabled people in the long-term.</p>
<p>Prominent political figures including Tony Blair, Ken Livingstone and the chairman of the London Organising Committee, Sebastian Coe, placed <a href="https://www.gov.uk/government/publications/london-2012-a-legacy-for-disabled-people-april-2011">diversity and inclusion</a> at the heart of the London legacy plans. They contended that the magic of hosting is in <a href="https://doi.org/10.3727/152599520X15894679115583">the ability of such events</a> to tackle endemic social problems.</p>
<p>Quite whether London 2012 has delivered on its promises for disabled people depends largely on who you talk to. The UK government and many of those involved in organising the London 2012 Paralympic Games <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/450712/1619-F_Sports_Strategy_ACCESSIBLE.pdf">have hailed them a great success</a>. </p>
<p>Experts and organisations representing disabled people paint a very different picture, however. As medical historian and author Anne Borsay <a href="https://www.bloomsbury.com/uk/disability-and-social-policy-in-britain-since-1750-9780333912546/">pointed out</a> in her book Disability and Social Policy in Britain Since 1750: A History of Exclusion, disabled people in Britain (as in many countries around the world) were deemed second-class citizens before 2012 – and, on the whole, they still are.</p>
<p><a href="https://www.tandfonline.com/doi/abs/10.1080/02614367.2019.1694569?journalCode=rlst20">Research shows</a> they are often marginalised from the rest of society through a mixture of <a href="https://theconversation.com/paralympics-havent-decreased-barriers-to-physical-activity-for-most-people-with-disabilities-165145">physical barriers</a>, negative attitudes, and a lack of access to education, employment, housing and <a href="https://www.theguardian.com/commentisfree/2010/sep/19/disability-social-obstacles-real-problem">other key resources</a>. This was a problem identified, in particular, in the <a href="https://www.reuters.com/article/us-japan-disabled-idUSKCN11M0AM">lead-up</a> to the Tokyo 2020 Olympics and Paralympics in Japan. </p>
<h2>Inclusivity was a central aim</h2>
<p>Underpinning <a href="https://www.gov.uk/government/publications/london-2012-a-legacy-for-disabled-people-april-2011">London 2012 legacy plans</a> for disabled people was what experts and campaigners term the <a href="https://www.scope.org.uk/about-us/social-model-of-disability/">“social model”</a> of disability. Contrary to the medical model, which posits that disability is caused by a person’s impairments or difference, the social model holds that people are disabled by barriers in society. The idea, therefore, is to change societal attitudes in order to enable people with disabilities to live good lives. </p>
<p>These legacy plans comprised three broad aims. First, to improve access for disabled people to goods, services and employment opportunities and to work with the media to positively raise the profile of disabled people’s place and talents in society. </p>
<p>Second, to support opportunities for disabled people to participate in sport and physical activity, in particular. And third, to promote greater participation in the community through the Games. </p>
<p>It is possible to claim limited successes for the London Games, particularly around elite parasports and education. Advocates at the highest level of sport and politics used the London 2012 Paralympics to influence the infrastructure and education around disability. Ex-Paralympians Tanni Grey-Thompson and <a href="https://www.disabilitynewsservice.com/london-2012-paralympics-boss-will-lead-on-disability-for-ehrc/">Chris Holmes</a> now sit in the House of Lords, where they are able to push for change. </p>
<p>And in its <a href="https://www.paralympic.org/news/schools-get-set-london-2012-grants-plan-their-games">Get Set education programme</a>, for the first time an Olympic organising committee used the <a href="https://www.paralympic.org/feature/what-are-paralympic-values">Paralympic values</a> – courage, determination, inspiration and equality – as well as <a href="https://theconversation.com/tokyo-olympics-winning-could-become-about-managing-covid-stress-162951#:%7E:text=We%20believe%20in%20the%20free%20flow%20of%20information&text=Olympism%2C%20the%2019th%2Dcentury%20philosophy,%3A%20excellence%2C%20friendship%20and%20respect.">Olympic Values</a> in the <a href="https://www.tandfonline.com/doi/abs/10.1080/23750472.2019.1591296?tab=permissions&scroll=top">national schools programme</a> during London 2012. This has become the blueprint for the globally successful <a href="https://im-possible.paralympic.org/">I’m Possible</a> Paralympic educational resource. <a href="https://res.ssrc.ac.ir/article_2210.html?lang=en">Research shows</a> how Olympic host cities and national paralympic committees have used what they learned from London 2012 to build the visibility of the Paralympic movement and its role in sport and society. </p>
<p>Closer to home, UK Sport and Sport England have prioritised and consistently funded elite – and to a lesser extent, grassroots – sports provision for disabled people across the country. Since London 2012, the Great Britain Paralympic team, in particular, has enjoyed increased funding and continued success at all summer and winter Paralympic Games.</p>
<h2>Disabled people’s lives have worsened</h2>
<p>In terms of transforming attitudes towards disabled people and increasing their participation in the community, however, success cannot be claimed.
<a href="https://kar.kent.ac.uk/72201/">Research has found</a> that London 2012 Paralympics had a minimal impact on the number of disabled people taking part in sports. Further, in 2018, the <a href="https://www.activityalliance.org.uk/news/4430-the-activity-trap-benefits-or-being-fit">Activity Alliance</a> released research showing that “almost half of disabled people (47%) fear losing their benefits if they are seen to be physically active.” </p>
<p>Moreover, disabled people’s lives <a href="https://www.tandfonline.com/doi/abs/10.1080/02614367.2019.1694569?journalCode=rlst20">have been shown</a> to have worsened since 2012. The <a href="https://www.un.org/disabilities/documents/COP/alam.doc">fallout</a> from the 2008 global economic crash meant that people with disabilities across the world were facing greater poverty, exclusion and risk of abuse. </p>
<p>The austerity measures put in place in the UK from 2010 saw disabled people described as benefit scroungers in the national press. In 2019, the United Nations <a href="https://www.theguardian.com/politics/2019/may/22/un-report-compares-tory-welfare-reforms-to-creation-of-workhouses">published</a> a <a href="https://documents-dds-ny.un.org/doc/UNDOC/GEN/G19/112/13/PDF/G1911213.pdf?OpenElement">scathing report</a> on how the UK government was treating disabled people. By 2022, the report projected, some families with disabilities in the UK would have lost more than 30% of their annual net income. It also highlighted how many people were already shouldering most of the financial burden of their own care. </p>
<p>The pandemic, of course, has <a href="https://theconversation.com/how-pandemic-responses-neglected-disabled-peoples-rights-158591">made a bad situation worse</a>. Research shows disabled people have been <a href="https://disabilityundersiege.org/wp-content/uploads/2021/03/Impact-of-COVID-19-on-disabled-people-literature-review.pdf">severely impacted</a>. According to the <a href="https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/deaths/articles/coronaviruscovid19relateddeathsbydisabilitystatusenglandandwales/24januaryto20november2020">Office of National Statistics</a>, people with disability comprised six in every ten COVID-19 related deaths in the UK in 2021. </p>
<p>As a result of these compounded crises, the author, journalist and disability activist Frances Ryan <a href="https://www.versobooks.com/books/3625-crippled">has claimed</a> that disabled people in the UK are now enduring “nine times the burden of cuts compared to the average citizen, with people with the most severe disabilities being hit a staggering 19 times harder”.</p>
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Read more:
<a href="https://theconversation.com/why-the-london-2012-olympics-had-limited-impact-on-volunteering-across-the-uk-187305">Why the London 2012 Olympics had limited impact on volunteering across the UK</a>
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<p>The International Paralympic Committee has launched two campaigns – <a href="https://www.wethe15.org/">WeThe15</a> and <a href="https://www.thevaluable500.com/">The Valuable 500</a> – which effectively broaden the scope for reshaping the way society views disabled people. It is a tacit acknowledgement that mega-events <a href="https://journals.sagepub.com/doi/abs/10.1177/0193723516655580">do not take place</a> in a vacuum. They, and any associated legacy plans, are just as susceptible to external issues beyond their control – meaning that on their own, these events cannot achieve the transformational social change that is often claimed for them.</p>
<p>Because they elicit such extensive media coverage, the Paralympic Games can start a discussion around disability issues. But for things to really change, one summer mega-sporting event every four years is simply not enough.</p><img src="https://counter.theconversation.com/content/187298/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Dr Ian Brittain has received Marie Curie funding from the European Union to investigate the social and economic impacts of mega events (FP7) and also to address inequality and diversity in the hosting of mega events (H2020)..
Dr Brittain is also the Heritage Advisor to the International Wheelchair and Amputee Sports Federation</span></em></p><p class="fine-print"><em><span>Dr. Mike Duignan has previously received funding from the International Olympic Committee (IOC), but for a topic unrelated to this article. Mike is also the Director of the Observatory for Human Rights and Major Events which is the UK's official Olympic Studies Centre, which is affiliated to the IOC's academic Olympic Studies Centre. However, the nature of this relationship is academic with the view to disseminate good social science concerning how we can enhance the social and economic benefits of hosting the Olympic Games for the host country, city and its citizens. This article was based on work funded by 2020 Marie Skłodowska-Curie Actions, Research and Innovation grant agreement no. 823815.</span></em></p><p class="fine-print"><em><span>Verity Postlethwaite has received funding from the Japan Society for the Promotion of Science (PE18768) to analyse the policy making process for disability sport in Japan and the United Kingdom: 2012 – 2020.</span></em></p>Mega-events like the Olympics have the potential to start important conversations around societal change. But improving the lives of disabled people takes much more than that.Ian Stuart Brittain, Associate Professor in Disability Studies, Coventry UniversityMike Duignan, Reader in Events and Director of the Observatory for Human Rights and Major Events, University of SurreyVerity Postlethwaite, Research associate, Japan Research Centre, SOAS, University of LondonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1775982022-02-25T16:11:36Z2022-02-25T16:11:36ZGreen space access is not equal in the UK – and the government isn’t doing enough to change that<figure><img src="https://images.theconversation.com/files/448537/original/file-20220225-15-jby5fz.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C3300%2C2198&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Wealthy areas of London have better green space provision than the national average.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/canary-wharf-famous-skyscrapers-londons-financial-63069820">QQ7/Shutterstock</a></span></figcaption></figure><p>A growing gap in green space provision divides the UK according to <a href="https://www.cpre.org.uk/wp-content/uploads/2022/01/Feb-2022_CPRE_Local-Green-Spaces-full-report-1.pdf">recent research</a>, with people in northern cities having access to fewer parks than their southern counterparts.</p>
<p>Nationwide, ethnically diverse communities and people living on low incomes are more likely to live in areas without accessible or high-quality wild places or parks, according to data from <a href="https://www.gov.uk/government/statistics/the-childrens-people-and-nature-survey-for-england-summer-holidays-2021-official-statistics/the-childrens-people-and-nature-survey-for-england-summer-holidays-2021-official-statistics">Natural England</a> and the <a href="https://www.ons.gov.uk/releases/accesstogardensandpublicgreenspaceingreatbritain">Office for National Statistics</a>. These communities are more likely to suffer <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/904439/Improving_access_to_greenspace_2020_review.pdf">poorer health outcomes</a>, with higher incidences of heart and lung disease, depression, diabetes and obesity.</p>
<p>To address this inequity, a coalition of <a href="https://www.theguardian.com/environment/2022/feb/21/uk-wildlife-campaigners-call-for-legal-right-to-access-nature-for-all">environmental charities</a> has called for equal access to nature to be enshrined in law. This echoes proposals for a legal right to nature, which have been discussed by the <a href="http://www.harmonywithnatureun.org/rightsOfNaturePolicies/">United Nations</a>. </p>
<p>A legal right to nature will not guarantee everyone enjoys easier access, or even help anyone who wants to use green spaces however. Without sustained funding and proactive local planning, existing problems will persist, particularly in the most deprived areas. </p>
<p>So what’s the government doing to ensure everyone can enjoy the UK’s green spaces?</p>
<figure class="align-center ">
<img alt="Two people stand with hands on hips smiling into the sun with trees surrounding them." src="https://images.theconversation.com/files/448541/original/file-20220225-17-1xzitmz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/448541/original/file-20220225-17-1xzitmz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=401&fit=crop&dpr=1 600w, https://images.theconversation.com/files/448541/original/file-20220225-17-1xzitmz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=401&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/448541/original/file-20220225-17-1xzitmz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=401&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/448541/original/file-20220225-17-1xzitmz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/448541/original/file-20220225-17-1xzitmz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/448541/original/file-20220225-17-1xzitmz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Spending time in nature has been linked to health benefits.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/couple-asian-woman-enjoying-freedom-standing-1459409876">GBALLGIGGSPHOTO/Shutterstock</a></span>
</figcaption>
</figure>
<p>The government recently unveiled its <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1052060/Levelling_Up_White_Paper.pdf">white paper</a> proposals for “levelling up” the UK country and reducing regional inequality. The plans dedicate £39 million to refurbish parks and green spaces across the UK. </p>
<p>This includes <a href="https://www.local.gov.uk/about/news/spending-review-2021-lga-responds-ps9-million-funding-100-new-urban-pocket-parks-across">money</a> to create 100 urban “pocket parks” on derelict land in communities with the least access to nature. The government’s proposals envision a future where people have greater access to wildlife and parks within a five- to ten-minute walking distance from home. </p>
<p>At first, £39 million sounds substantial. But it falls well short of reversing the drastic cuts to the finances of many local authorities by central government over a decade of austerity. Local councils are the <a href="https://www.apse.org.uk/apse/index.cfm/research/current-research-programme/state-of-uk-public-parks-2021/">primary landowners and managers</a> of public parks in the UK. Newcastle City Council, for instance, had to <a href="https://www.newcastle.gov.uk/citylife-news/lifestyle/what-does-future-hold-parks-and-green-spaces">slash its parks budget</a> 91% from £2.58 million to £87,000 between 2010 and 2017.</p>
<p>The white paper proposes redistributing investment to north-west and north-east England, regions which have suffered chronic underfunding. But it fails to recognise the depth of problems facing the country’s parks and green spaces. </p>
<p>Swingeing cuts to council budgets and ensuing <a href="https://www.apse.org.uk/apse/index.cfm/blog/managing-parks-and-open-spaces-in-the-age-of-austerity/">redundancies</a> have created a shortage in workers with the relevant skills to maintain parks. And proposing capital refurbishment with minimal funding for long-term maintenance of these green spaces will not sustain a safe, accessible, and high-quality natural environment. Cutting the ribbon on a new park is just the start of the commitment, not the end.</p>
<p>Meanwhile, pressure from housing developers threatens to <a href="https://www.manchesterworld.uk/news/carrington-moss-meet-the-residents-battling-to-prevent-development-at-a-manchester-green-space-3539806">convert</a> more green space into residential areas.</p>
<h2>Access for whom?</h2>
<p>Access is also not just about how far you live from a park. Feeling unsafe or unwelcome there can be just as significant. Young people, the elderly, women and girls, and people from ethnic minorities are more likely to experience <a href="https://www.groundwork.org.uk/wp-content/uploads/2021/05/Out-of-Bounds-equity-in-access-to-urban-nature.pdf">verbal or physical harassment</a> in public places. Simply creating a new park, or allowing access to an existing natural area, does not mean everyone will be able to use it.</p>
<p>People in dense urban areas are among the <a href="https://www.ons.gov.uk/economy/environmentalaccounts/datasets/accesstogardensandpublicgreenspaceingreatbritain">most isolated</a> from nature. Investment in inner-city green space, as part of a concerted effort to meet the needs of all communities, would be a worthwhile endeavour.</p>
<figure class="align-center ">
<img alt="Two people sit on a park bench with takeaway coffee, smiling and talking." src="https://images.theconversation.com/files/448545/original/file-20220225-19-vd3ud5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/448545/original/file-20220225-19-vd3ud5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/448545/original/file-20220225-19-vd3ud5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/448545/original/file-20220225-19-vd3ud5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/448545/original/file-20220225-19-vd3ud5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/448545/original/file-20220225-19-vd3ud5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/448545/original/file-20220225-19-vd3ud5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Distance isn’t the only thing which determines whether someone can enjoy green spaces.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/two-british-muslim-women-eating-lunch-588829166">Shutterstock</a></span>
</figcaption>
</figure>
<p>The government does offer communities the chance to nominate valuable places close to home for <a href="https://www.oss.org.uk/need-to-know-more/information-hub/local-green-space-designation/">local green space designations</a>. If approved, these areas would become subject to the same restrictions on development as green belt land. <a href="https://gov.wales/sites/default/files/publications/2019-10/cat%20guide.pdf">Community asset transfers</a> even allow community groups or social enterprises to take ownership of green spaces from a public body. </p>
<p>Giving local people a bigger role in these matters is a positive step, but they may <a href="https://www.publicfinance.co.uk/opinion/2016/03/community-asset-transfers-must-not-turn-liabilities">privilege</a> people with the time and legal knowledge necessary to apply for such designations.</p>
<p>Sustained financial support would allow councils to plan strategically for long-term improvements to green spaces. On this front at least, there are reasons to be hopeful. The government finally appears to be reinvesting in, rather than decimating, park budgets, and is featuring parks and green spaces more prominently in national policy. </p>
<p>The recently passed <a href="https://bills.parliament.uk/bills/2593">Environment Act</a> will include a legal requirement obliging new developments to <a href="https://www.theguardian.com/environment/2022/feb/25/natural-england-chair-tony-juniper-backs-biodiversity-net-gain-plan-boost-wild-areas">boost local biodiversity</a> by 10% and new planning tools to <a href="https://www.london.gov.uk/sites/default/files/urban_greening_factor_lpg_pre-consultation_draft.pdf">evaluate how green</a> a new construction project is. </p>
<p>These measures support <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/904439/Improving_access_to_greenspace_2020_review.pdf">public health initiatives</a> which recognise the importance of urban green space for wellbeing and cement the value of park spending in the public consciousness.</p>
<p>The government still has a long way to go to recuperate the shortfall in local authority park budgets, and is far from ensuring all UK residents have access to nature near where they live. But given the recent history, its levelling up proposals are a small step in the right direction.</p><img src="https://counter.theconversation.com/content/177598/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Meredith Whitten is a researcher in residence at Parks for London, a UK-based charity.</span></em></p><p class="fine-print"><em><span>Ian Mell does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The promised £39 million is not enough to ‘level up’ park provision in the UK.Ian Mell, Reader in Environmental & Landscape Planning, University of ManchesterMeredith Whitten, Fellow in Environment, London School of Economics and Political ScienceLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1707512021-10-29T13:18:21Z2021-10-29T13:18:21ZBoris Johnson has ended the age of austerity – but his party isn’t on board<p>As the Conservative party wrestled with its future direction towards the end of the 1970s, Margaret Thatcher’s think tank, the Centre for Policy Studies, published a pamphlet of speeches by its co-founder, Keith Joseph.</p>
<p>The centre had been created <a href="https://c59574e9047e61130f13-3f71d0fe2b653c4f00f32175760e96e7.ssl.cf1.rackcdn.com/0BAC145CDADF466FBB7E70DBB59B41EB.pdf">“to change the climate of opinion”</a> in British politics, and the collection of speeches, which came out on October 27 1976, sought to explain what needed to change for the Conservatives to win power again. </p>
<p>In it, not only Conservative election failure but also British national decline were attributed to the party’s quest for the middle ground in politics. Joseph wrote of “a compromise between politicians, unrelated to the aspirations of the people”. </p>
<p>This had led to an economic crisis, “a left-wing ratchet” and <a href="https://cps.org.uk/wp-content/uploads/2021/07/111028103106-WhyBritainneedsaSocialMarketEconomy.pdf">“the drift towards state socialism and centralisation”</a>. Salvation for both party and country would be found by occupying the <a href="https://cps.org.uk/wp-content/uploads/2021/07/111028102825-StrandedontheMiddleGround1976.pdf">“common ground with the people and their aspirations”</a>.</p>
<p>Ever since Thatcher, Conservative leaders have confronted a central political and ideological dilemma: whether to fight elections from the social democratic centre ground of fiscal expansion or the Thatcherite, centre-right “common ground” of fiscal conservatism.</p>
<p>Exactly 45 years to the day since the publication of Joseph’s speeches, the government of Boris Johnson unveiled a budget and spending review that suggested he has chosen the centre ground. But the degree to which the Conservative party is today rooted in the common ground suggests maintaining this position will be far from easy.</p>
<p>The <a href="https://cps.org.uk/wp-content/uploads/2021/07/111026104730-5B6518B5823043FE9D7C54846CC7FE31.pdf">“sea-change in Britain’s political economy”</a> attempted during eleven years of Thatcher government duly witnessed fiscal conservatism. Public spending shrunk from <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1003755/CCS207_CCS0621818186-001_PESA_ARA_2021_Web_Accessible.pdf">41% of GDP in 1979-80 to 34.7% in 1989-90</a>.</p>
<p>By 2006, new party leader David Cameron was seeking to define <a href="https://www.theguardian.com/politics/2006/jan/30/conservatives.davidcameron">modern, compassionate conservatism</a>. Thanks to the “Thatcher revolution”, he posited, the Conservatives had won the battle of ideas in British politics. The common ground had become the new centre ground. </p>
<p>The proof of that ideological victory was none other than Tony Blair, who had moved his party from the left to the centre and won an election as a result. But, Cameron highlighted, this left the Conservatives moving to the right and allowed Blair to redefine the common ground as <a href="https://www.theguardian.com/politics/2006/jan/30/conservatives.davidcameron">“social justice and economic efficiency”</a>.</p>
<p>Therefore, the Conservatives must change to win. They had to fight for the centre ground or risk <a href="https://www.theguardian.com/politics/2006/jan/30/conservatives.davidcameron">“irrelevance, defeat and failure”</a>.</p>
<h2>Cameron’s ‘new culture of thrift’</h2>
<p>Consequently, Cameron initially signed up to New Labour’s fiscal plans for public spending and borrowing. However, when the onset of the 2007-8 financial crisis drove the United Kingdom economy into recession, Cameron abandoned his shadowing of Labour’s fiscal plans.</p>
<p>Cameron told his party “the age of irresponsibility is giving way to <a href="https://conservative-speeches.sayit.mysociety.org/speech/601367">the age of austerity</a>”. He argued that a complete change of direction was needed. </p>
<p>This would entail a return to fiscal conservatism – “delivering more with less” – and “a new culture of thrift in government”. The goal was a fiscal tightening equivalent to 6.3% of GDP by 2014-15 to eliminate the budget “deficit” inherited from Labour. </p>
<p>But this was never achieved. Instead, the Conservative/Liberal Democrat coalition’s <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/78977/coalition_programme_for_government.pdf">“unavoidable deficit reduction plan”</a>, which was meant to last for a single parliamentary term, evolved into a <a href="https://www.gov.uk/government/publications/the-governments-long-term-economic-plan">“long-term economic plan”</a>. </p>
<p>The coalition’s age of austerity was prolonged by the government of Theresa May so that, in the end, it lasted a decade. She aimed to deliver <a href="https://obr.uk/efo/economic-and-fiscal-outlook-october-2021/">a total fiscal consolidation of 8.8% of GDP by 2018-19</a>, 82% of which was achieved by cuts in public spending.</p>
<p>Cameron’s fiscal conservatism achieved the first Conservative majority in 23 years when he won the 2015 election. At the time <a href="https://lordashcroftpolls.com/2017/09/lost-majority-2017-election-conservative-party-voters-future/">84% of Conservatives and 46% of voters</a> overall had agreed that austerity had to continue. </p>
<p>But, barely two years later, May lost that majority on an election manifesto which included continued fiscal conservatism. Conservative pollster Michael Ashcroft subsequently <a href="https://lordashcroftpolls.com/2017/09/lost-majority-2017-election-conservative-party-voters-future/">found</a> that only half of Conservatives and a quarter of voters overall had agreed with austerity.</p>
<p>What’s more, around one quarter of voters (including about one in three Conservative voters) suggested cuts in spending were no longer needed. And a quarter of voters (including half of total Labour voters) had stated neither austerity nor public spending cuts had ever really been needed and had simply been a rationale for cutting public services.</p>
<h2>Johnson’s ‘age of optimism’</h2>
<p>The autumn 2021 budget has highlighted that the current prime minister is acutely aware of the electoral dangers of fiscal conservatism for a government which has promised to <a href="https://www.gov.uk/government/publications/build-back-better-our-plan-for-growth">“build back better”</a> and <a href="https://www.gov.uk/government/speeches/the-prime-ministers-levelling-up-speech-15-july-2021">“level-up”</a> the country. Although it was delivered by instinctive Thatcherite and fiscal conservative Chancellor Rishi Sunak, the budget was replete with Johnsonian boosterism. It set out how this government would deliver “an economy fit for a new <a href="https://www.gov.uk/government/speeches/autumn-budget-and-spending-review-2021-speech">age of optimism”</a>.</p>
<p>Sunak’s preference would be for further fiscal retrenchment. But that is hard to reconcile with optimism of any kind – especially since Mark Carney, the former governor of the Bank of England, famously described the last age of austerity as <a href="https://www.bankofengland.co.uk/-/media/boe/files/speech/2016/the-spectre-of-monetarism.pdf">“the first lost decade since the 1860s”</a>.</p>
<p>Moving away, at least in fiscal policy terms, from the ideological common ground will mean embracing a public spending profile more redolent of the New Labour years. It will also mean a taxation profile more reminiscent of the 1950s <a href="https://www.brightblue.org.uk/what-should-one-nation-conservatism-mean-in-the-2020s/">one nation conservatism</a> so despised by Thatcherites. </p>
<p>The Office for Budget Responsibility says the tax burden will have to be raised from its pre-pandemic level of 33.5% of GDP to 36.2% of GDP in 2026-27 – <a href="https://obr.uk/efo/economic-and-fiscal-outlook-october-2021/">its highest level since the 1950s</a>. There will also need to be discretionary increases in public spending from 39.8% of GDP prior to the pandemic to 41.6% of GDP in 2026-27. This, the OBR notes, would be <a href="https://obr.uk/efo/economic-and-fiscal-outlook-october-2021/">“the largest sustained share of GDP since the late 1970s”</a>, the very era which gave birth to Thatcherism’s quest to roll back the frontiers of the state.</p>
<p>Meanwhile, the recent track record of Conservative MPs has been one of repeated overt dissent and rebellion. It was notable that budget week began with a distinctive photo call for party favourite Foreign Secretary <a href="https://www.dailymail.co.uk/news/article-10127621/Busy-Lizzy-meets-Big-Lizzy-Foreign-Secretary-Truss-lands-HMS-Queen-Elizabeth.html">Liz Truss</a> – an arch Thatcherite and rival to Sunak for the Johnson succession. </p>
<figure class="align-center ">
<img alt="Liz Truss standing on the deck of an aircraft carrier." src="https://images.theconversation.com/files/429449/original/file-20211031-17-1woekh1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/429449/original/file-20211031-17-1woekh1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/429449/original/file-20211031-17-1woekh1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/429449/original/file-20211031-17-1woekh1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/429449/original/file-20211031-17-1woekh1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/429449/original/file-20211031-17-1woekh1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/429449/original/file-20211031-17-1woekh1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Liz Truss spies her moment for a Thatcherite photo op.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/192333790@N05/51622578620/">Flickr/UK government</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-sa/4.0/">CC BY-NC-SA</a></span>
</figcaption>
</figure>
<p>She was dressed in military garb on the deck of HMS Queen Elizabeth, evidently trying hard to replicate the iconic cold war image of Thatcher <a href="https://iconicphotos.wordpress.com/2009/04/23/thatcher-in-a-tank/">riding in a British army tank</a> on a NATO tank range in West Germany.</p>
<p>One wonders how long it will be before the torchbearers for Thatcherism in the cabinet and among Conservative MPs will break cover to demand a return to the common ground and their one true faith – or else a change in leadership.</p><img src="https://counter.theconversation.com/content/170751/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Simon Lee does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The prime minister’s party has long sought to reconcile political popularity with fiscal constraint.Simon Lee, Senior Lecturer in Politics, University of HullLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1546072021-09-13T14:31:26Z2021-09-13T14:31:26Z‘I don’t think I can cope financially’ – the people putting off parenthood because of austerity<p>Britain’s birth rates are plunging. The number of babies being born has been in <a href="https://www.bbc.co.uk/news/health-53409521">steep decline</a> since 2017. Now, researchers are investigating <a href="https://www.pnas.org/content/118/36/e2105709118">early signs</a> that the pandemic may have caused rates to drop even further.</p>
<p>This is not totally surprising given the difficult economic conditions that have come with the pandemic – history also shows that economic uncertainty has long been associated with <a href="https://pubmed.ncbi.nlm.nih.gov/22066128/">reduced birth rates</a>.</p>
<p>The birth rate in the UK has been <a href="https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/livebirths/bulletins/birthsummarytablesenglandandwales/2019">declining year on year</a> since 2013 and has been linked to the <a href="https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/livebirths/bulletins/birthsummarytablesenglandandwales/2019">austerity measures</a> implemented by the government in response to the 2008 global financial crisis. </p>
<p>Austerity cuts have <a href="https://www.sscr.nihr.ac.uk/impact-of-austerity/">decimated social care</a>, welfare and local government. They have led to <a href="https://www.london.gov.uk/sites/default/files/tom_copley_am_homelessness_-_the_visible_effect_of_austerity.pdf">rising rents</a> (private rents increased by 24% between 2010 to 2017), shrinking social housing stock, adults living or moving <a href="https://www.aberdeenstandard.com/docs?documentId=GB-191020-131715-1">back home with parents</a>, along with more people <a href="https://theconversation.com/employment-may-be-at-an-all-time-high-in-the-uk-but-austerity-low-pay-and-zero-hours-contracts-inflict-misery-on-millions-110252">precariously employed</a>, due to insecure forms of work and retreating state support. Such <a href="https://www.intersecting-inequalities.com/">inequalities</a> have seeped into the fabric of everyday life. And these austerity measures have been particularly acute for young people growing up over the past ten years. </p>
<p>As part of my <a href="https://www.isrf.org/fellows-projects/sarah-marie-hall/">recent research</a>, I looked at how austerity has influenced people’s decisions around having children. <a href="https://aspect.ac.uk/resources/research-method-oral-histories-and-futures/">I carried out</a> in-depth interviews with 12 people living in the North East of England – a region that has some of the <a href="https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/livebirths/datasets/birthsbyareaofusualresidenceofmotheruk">lowest birth rates</a> in the UK – and that has been <a href="https://www.theguardian.com/society/2011/dec/02/north-east-2017-damaged-economy">significantly damaged</a> by austerity.</p>
<h2>Altered reproductive plans</h2>
<p>All the people I spoke to had been deeply affected by the government’s austerity measures. They told me how the cuts in spending and the economic climate had altered their reproductive plans. Vihaan was not alone when he told me how he and his partner had put their plans on hold because of issues with “financial planning, stability…and having enough of a financial back up so that we can afford a decent life”. </p>
<p>Many people I spoke with also found it hard to know whether to have children – or more children if they already had a child. Austerity had affected their intimate relationships and changed their feelings about what their future might hold.</p>
<p>They spoke a lot about their worries for the future. Most of these worries were based on financial insecurity – concerns about secure and appropriate housing, steady employment – as well as meaningful and healthy relationships. </p>
<p>They also spoke about the sheer pressure of carrying these worries, keeping them in check and at the same time holding together hopes for their unknown reproductive futures.</p>
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<img alt="Woman holding newborn baby in chair." src="https://images.theconversation.com/files/411490/original/file-20210715-23-1t3xnoq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/411490/original/file-20210715-23-1t3xnoq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/411490/original/file-20210715-23-1t3xnoq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/411490/original/file-20210715-23-1t3xnoq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/411490/original/file-20210715-23-1t3xnoq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/411490/original/file-20210715-23-1t3xnoq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/411490/original/file-20210715-23-1t3xnoq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">The birth rate in England and Wales is now the lowest it has ever been since records began.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/parents-home-hospital-newborn-baby-627703283">Shutterstock</a></span>
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<p>One participant, Lauren, said she worries about financial instability – particularly her partner’s debt - and how this will affect their future. Like many other participants, Lauren spoke about wanting to do more than just survive:</p>
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<p>I want to be in the position in the future where I do have a kid, that I think I can give it everything it wants. I don’t want to have to scrimp and save to be able to give it a life.</p>
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<p>Similarly, Jonny spoke about his worries of needing to feel ready and prepared if they were to have a child. For him and his partner, this included having certain material and practical elements in place – housing, childcare and income - before feeling able to make a decision. </p>
<p>He described this as “sorting ourselves out” and spoke about all the decision making this involved: whether to have children or not, whether to stay living where they are now or to move closer to his mum, along with whether to keep his stable job or to risk setting up his own business. He talked about “putting real thought” into these decisions and “weighing them up”.</p>
<h2>Limited choice</h2>
<p>For the people I interviewed, and many others like them, a combination of personal circumstances and government cuts in spending have made their futures less certain. And for some, it has taken away the possibility of having children – or more children – because of ongoing financial concerns and worries. </p>
<p>Sze-Kei described the impact of austerity measures on her family, saying: “at the back of your mind, you have to think about the financial side of things”. She talked about how she hoped to have another child in the future but she worried about if they could afford it. She spoke about how she wanted to remember how hard it is to raise children and how she felt about being pregnant the first time. Sze-Kei also seemed to bear this worry more than her husband, saying “I don’t think I can cope financially”. </p>
<p>In this way, it is important to recognise that austerity policies not only directly affect people’s lives and decision making, but they ultimately shape people’s life course – with those on the lowest incomes often hit hardest. And given the ongoing uncertainty as a result of the pandemic, along with the fact that poor young people have been the <a href="https://learningandwork.org.uk/news-and-policy/risk-of-lost-pandemic-generation-as-young-people-hardest-hit-by-coronavirus-crisis/">hardest hit by COVID</a>, this may well be a trend that continues for some time to come. </p>
<p>*All names have been change</p><img src="https://counter.theconversation.com/content/154607/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sarah Marie Hall received funding from the ISRF (Political Economy Fellowship) and UKRI (Future Leaders Fellowship) for the writing of this piece.</span></em></p>Interviewees describe ‘scrimping and saving’ to make ends meet.Sarah Marie Hall, Reader in Human Geography, University of ManchesterLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1675772021-09-08T18:00:51Z2021-09-08T18:00:51ZSocial care tax rise is austerity by another name – economist Q&A<p><em>Boris Johnson <a href="https://theconversation.com/social-care-reform-why-boris-johnsons-plan-wont-fix-the-crisis-expert-view-167472">has unveiled</a> an additional 1.25% levy on national insurance paid by wage earners and employers, which will raise £14 billion a year to help pay for the NHS and reforms to social care. Coming on the back of rises to income tax and corporation tax that <a href="https://theconversation.com/budget-2021-austerity-by-stealth-will-repeat-the-mistakes-of-2010s-all-over-again-156404">were announced</a> in the <a href="https://theconversation.com/budget-2021-strip-away-pandemic-largesse-and-uk-is-banking-on-recovery-with-no-extra-public-spending-156420">budget in March</a>, it is the latest example of the government using tax rises rather than austerity to rein in public finances that have been hit by the cost of the pandemic.</em></p>
<p><em>We asked Alex de Ruyter, a Professor of Economics at Birmingham City University, to explain how it would affect different parts of society.</em></p>
<p><strong>Q: How will the levy hit the different groups who are affected by it?</strong></p>
<p>Raising national insurance (NI) contributions is going to disproportionately affect wage earners. This means it will disproportionately affect <a href="https://www.ethnicity-facts-figures.service.gov.uk/work-pay-and-benefits/pay-and-income/household-income/latest">ethnic minorities</a> and <a href="https://commonslibrary.parliament.uk/how-much-less-were-women-paid-in-2019/">women</a>. Those in receipt of universal credit who are also working will have the double whammy of being hit by higher NI as well as losing £20 a week when the temporary increase for COVID <a href="https://www.bbc.co.uk/news/uk-41487126">ends on October 6</a>. </p>
<p>The principal beneficiaries are going to be those who now stand to inherit what would otherwise have gone on social care. These will overwhelmingly be those of a middle class, white British background and their numbers are concentrated in the south-east of England. There is some disquiet among so-called “red wall” Conservatives – those in the north who used to reliably vote Labour – but there is probably enough within the measures to placate MPs representing these regions.</p>
<p>After all, additional funding for the NHS tends to be popular among this group, and while the £86,000 lifetime spending cap on social care costs is unlikely to benefit them as much as their southern counterparts, the increase in state support for those with assets between £23,000 and £100,000 will. For the pensioner in Hartlepool in a three-bedroom terraced house <a href="https://www.onthemarket.com/for-sale/3-bed-houses/hartlepool/?direction=asc&sort-field=price">worth £40,000</a>, there will be advantages (albeit much smaller than for many in leafy districts in southern England). The real losers will be those without assets.</p>
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Read more:
<a href="https://theconversation.com/social-care-reform-lifetime-cap-on-costs-may-only-partially-protect-assets-167574">Social care reform: lifetime cap on costs may only partially protect assets</a>
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<p>As far as employers are concerned, it doesn’t necessarily follow that increasing their NI contributions will mean they pass on the costs in higher consumer prices. We know that raising corporation tax <a href="https://blackwells.co.uk/bookshop/product/9781305505797?gC=5a105e8b">rarely if ever</a> results in a price rise to the same amount (after all, corporation tax is a tax on profit, not revenue). And prices depend on a variety of factors including how much market power the company has in its sector and the cost of imported raw materials. Also remember it is the job of the Bank of England and not the Treasury to control inflation. </p>
<p>As for whether employers paying more NI could affect the potential for employees to take advantage of worker shortages to demand wage increases, that potential <a href="https://www.theguardian.com/money/2021/aug/16/few-uk-firms-facing-staff-shortages-plan-to-raise-pay-survey-finds">only exists</a> in jobs where workers have specialist skills and can’t easily be substituted for someone else. For example, lorry drivers benefit from the fact that not everyone can afford the cost of getting an HGV licence. </p>
<p>You will also not make a big difference to social care with this levy. Apart from the fact that most of the £14 billion a year this will raise <a href="https://ifs.org.uk/publications/15597">looks likely</a> to go to the NHS, you would need a root and branch shift to make a real difference to social care. That would mean giving staff decent wages, improving facilities and ending the way that it currently benefits those who can afford it. We would be talking about full state provision comparable to the NHS, to pay for which we would probably need to move away from taxing income towards taxing assets and wealth. </p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/social-care-reform-why-boris-johnsons-plan-wont-fix-the-crisis-expert-view-167472">Social care reform: why Boris Johnson’s plan won’t fix the crisis – expert view</a>
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<p><strong>Q: How will highest tax burden since 1950 affect the economy?</strong> </p>
<p>It’s difficult to talk about the magnitude of how consumption patterns will change without building models, but it’s something of a red herring to talk about the tax burden because it depends on who you are taxing. The announcement looks designed to benefit the government’s traditional voter base: people who own their own homes and who are in receipt of a pension. </p>
<p><strong>Q: What are the consequences of shifting the burden of taxation further <a href="https://ifs.org.uk/publications/15597">towards younger people</a>?</strong></p>
<p>Over time, we have shifted the burden of taxation towards income and consumption. A corollary is that we don’t tax assets enough, which creates a real fairness issue. It’s not fair that people who inherit assets get all the benefits without doing anything for it. </p>
<p>And while it may be true that <a href="https://www.theguardian.com/society/2020/jan/02/uk-retirees-spending-rockets-as-younger-people-spend-less">older people spend more</a> than younger people, and therefore our consumer economy benefits from that, it does not follow that older people would spend less if you taxed them more. If I have £100,000 to buy a Jaguar, I’ve probably got enough to pay £105,000 for it. There’s more than enough <a href="https://www.journals.uchicago.edu/doi/abs/10.1086/381475">evidence to show</a> that the rich save while the poorer spend. Since the rich <a href="https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/ageing/articles/livinglongerhowourpopulationischangingandwhyitmatters/2018-08-13">tend to be older</a>, it suggests they could spend more. </p>
<p><strong>Q: Is tax-raising an improvement on austerity?</strong></p>
<p>Austerity isn’t over. For government departments that aren’t ring-fenced, there are <a href="https://ifs.org.uk/publications/15597">more spending cuts</a> likely to be coming in. Also, tax-raising is only an improvement if you tax the right people. By disproportionately hitting the poor, this levy is just austerity by another name. </p>
<p>As for this notion that there isn’t a magic money tree, we have seen that there was for COVID. With interest rates at unprecedented lows, the government has a lot more capacity to spend and help people than would otherwise be the case. Margaret Thatcher used to compare the public finances to a household as a way of arguing for “balancing the books”, but the government is not a household: it’s collective and immortal. </p>
<p>Essentially I am a Keynesian: if you invest in the economy, you are growing your productive capacity and that will enable you to pay down debt in time. I wouldn’t want to set a limit on how far you might take this, but if public debt is <a href="https://www.statista.com/statistics/282841/debt-as-gdp-uk/">close to 100%</a> of GDP at present, I would be comfortable under current borrowing conditions if it was 150% of GDP. Japan has a public debt of well over <a href="https://www.statista.com/statistics/267226/japans-national-debt-in-relation-to-gross-domestic-product-gdp/">200% of GDP</a>, for example.</p><img src="https://counter.theconversation.com/content/167577/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Alex de Ruyter does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Boris Johnson is raising national insurance for employees and employers to help pay for the NHS and social care.Alex de Ruyter, Professor of Economics and Director of the Centre for Brexit Studies, Birmingham City UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1673992021-09-06T15:03:02Z2021-09-06T15:03:02ZRishi Sunak’s fight to raise taxes to reform social care is nothing compared to financial battles ahead<p>The UK government’s widely trailed announcement that it will increase national insurance taxes by more than one percentage point to fund reform of the social care system and help fund the NHS has triggered a <a href="https://www.thetimes.co.uk/article/rishi-sunak-set-for-battle-as-he-tries-to-rein-in-spending-ppj270vcs">fierce political debate</a>. Many Conservatives <a href="https://www.theguardian.com/politics/2021/sep/05/pm-risks-significant-backlash-over-national-insurance-rise-says-hammond">are furious</a> that it means breaking an electoral promise not to raise taxes, while other people, <a href="https://www.independent.co.uk/news/uk/politics/national-insurance-labour-starmer-johnson-b1914890.html">especially on the left</a>, argue it is unfair to tax the young and relatively poor to help older, wealthier pensioners who own their own homes.</p>
<p>Beyond this controversy, there are much broader issues at stake about the future of the UK’s welfare state after a decade of austerity and the ravages of the pandemic. The social-care row is the opening salvo in a debate which will rage until later in the autumn when Chancellor Rishi Sunak announces his comprehensive spending review, which will set the course for the next general election.</p>
<h2>Austerity lite?</h2>
<p>The problem for the Conservatives in securing their election victory in the “<a href="https://www.bbc.co.uk/news/election-2019-50771014">red wall</a>” constituencies, which used to reliably vote Labour in the north of England, is they are somewhat beholden to them. The government has made promises to its new working-class voters to “<a href="https://theconversation.com/what-actually-is-levelling-up-what-we-know-about-boris-johnsons-agenda-and-what-we-dont-164886">level up</a>”, and to impose <a href="https://www.thesun.co.uk/news/10415189/boris-johnsons-spending-taps-end-austerity/">no more austerity</a>. </p>
<p>Boris Johnson also pledged to <a href="https://www.bbc.co.uk/news/uk-politics-58458292">reform social care</a> during the 2019 election, to improve a system that requires most people to sell their houses to pay for care in old age despite having paid taxes all their lives. This will cost over <a href="https://www.itv.com/news/2021-09-05/social-care-funding-talks-ongoing-as-tory-grandees-blast-national-insurance-hike">£10 billion</a> a year.</p>
<p>Yet the chancellor has set out a tough set of <a href="https://www.ft.com/content/a6e1d89e-6ccc-4362-84dd-3b735a782942">fiscal targets</a> to tackle the huge budget deficit built up during the pandemic. The government has racked up a debt of £2.2 trillion, which equates to the size of the entire UK economy. How does it square the circle?</p>
<p><strong>UK net debt as a % of GDP</strong></p>
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<a href="https://images.theconversation.com/files/419606/original/file-20210906-23-13mrh7t.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Graph showing UK net debt as a % of GDP for last 40 years" src="https://images.theconversation.com/files/419606/original/file-20210906-23-13mrh7t.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/419606/original/file-20210906-23-13mrh7t.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=283&fit=crop&dpr=1 600w, https://images.theconversation.com/files/419606/original/file-20210906-23-13mrh7t.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=283&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/419606/original/file-20210906-23-13mrh7t.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=283&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/419606/original/file-20210906-23-13mrh7t.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=356&fit=crop&dpr=1 754w, https://images.theconversation.com/files/419606/original/file-20210906-23-13mrh7t.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=356&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/419606/original/file-20210906-23-13mrh7t.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=356&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="attribution"><a class="source" href="https://tradingeconomics.com/united-kingdom/government-debt-to-gdp">Trading Economics/UK government</a></span>
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<p>So far, Sunak has managed to reassure the public that he is on their side while demonstrating to the markets that he won’t be a soft touch. He signalled in the March 2021 budget that he will put up taxes to meet his targets, announcing higher taxes on companies from 2023. This was met with relatively little criticism and <a href="https://yougov.co.uk/topics/politics/articles-reports/2020/03/10/budget-2020-what-tax-changes-would-be-popular">proved popular</a> with the public, and the <a href="https://yougov.co.uk/topics/politics/articles-reports/2017/01/12/majority-people-would-support-raising-national-ins">same is true</a> of the proposed rise in national insurance.</p>
<p>But more importantly, the chancellor has made it clear that less visible parts of public spending will be hit hard to keep the finances in check, freezing public-sector pay in the <a href="https://www.gov.uk/government/topical-events/spending-review-2020">2020 spending review</a>. And despite reluctantly granting <a href="https://www.nursingtimes.net/news/workforce/government-backtracks-with-3-pay-offer-for-nurses-in-english-nhs-21-07-2021/">extra money</a> for nurses in 2021, public-sector pay - which comprises one-third of all spending – seems likely to again be curtailed.</p>
<p>Meanwhile, Sunak <a href="https://www.bloomberg.com/news/articles/2021-04-27/ministers-told-to-find-savings-as-u-k-tackles-record-deficit">has asked</a> all government departments to make 5% “efficiency” savings and cut staffing levels. And though the government is committed to high-profile spending on health, education and defence, these departments may not get enough to restore spending to pre-austerity levels, while less favoured ministries <a href="https://www.resolutionfoundation.org/publications/to-govern-is-to-choose/">may well</a> suffer further cuts in real terms.</p>
<p>The chancellor has been particularly careful not to make any long-term spending commitments to non-departmental spending, such as a permanent increase to <a href="https://www.bbc.co.uk/news/uk-58384578">universal credit</a>. Indeed, he is also potentially preparing the ground for permanently scaling back pensioner benefits.</p>
<p>Shortly after the announcement on social care, <a href="https://www.dailymail.co.uk/news/article-9961041/Rishi-Sunak-set-break-Tory-manifesto-promise-costing-OAPs-16-month.html">Sunak is expected</a> to temporarily suspend the so-called “triple lock” on the state pension, another manifesto commitment. This stipulates that pensions rise each year at 2.5%, or in line with either the rate of inflation or average earnings, depending on which is the highest. Again, political uproar seems inevitable. </p>
<p>Meanwhile, the funds actually allocated to the regional “levelling up” agenda are extremely modest, with headline-grabbing proposals for freeports, but only a small amount of discretionary spending to improve town centres and deprived areas.</p>
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<strong>
Read more:
<a href="https://theconversation.com/what-actually-is-levelling-up-what-we-know-about-boris-johnsons-agenda-and-what-we-dont-164886">What actually is 'levelling up'? What we know about Boris Johnson's agenda – and what we don't</a>
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<h2>A lucky chancellor?</h2>
<p>The chancellor’s immediate challenges have been eased by the economy recovering quicker than expected from the pandemic. This has reduced spending and boosted revenues by <a href="https://www.ft.com/content/80aa4297-0a2e-4c36-ac3b-fb6e7f4e5041">some £25 billion</a>, which may reduce the immediate squeeze on spending. </p>
<p>And one consequence – a sharp rise <a href="https://www.theguardian.com/business/2021/sep/03/inflation-set-to-surge-this-autumn-as-brexit-and-covid-combine">in inflation</a> – has also temporarily helped Sunak. Wage inflation will push more workers into higher tax bands, increasing tax receipts further, and higher prices will mean more VAT returns. Inflation also reduces the value of the public debt in real terms. </p>
<p>For the future, a combination of stronger growth and modest inflation will be the most effective way of meeting the chancellor’s key target of stabilising the debt-to-GDP ratio, and so reassure the markets. But if inflation rises more rapidly, the Bank of England may raise interest rates, which could increase the cost of servicing the huge government debt. At present, the interest rate paid by the government on its debt currently at its lowest level in <a href="https://www.bbc.co.uk/news/business-51962982">over 300 years</a>.</p>
<p>However, despite the recent helpful economic numbers, the UK (and many other countries) are at a crucial turning point in the role of government. The future needs for public spending are likely to be much greater than before, and postponing decisions on tackling them will make the ultimate cost much greater.</p>
<p>The first challenge is tackling the economic legacy of the pandemic, and the damage caused to businesses and individuals, as well as government services. Second is to tackle the continued fall <a href="https://theconversation.com/how-to-boost-uk-productivity-after-coronavirus-133735">in UK productivity</a> since the economic crisis of 2007-09. This has caused wages to stagnate, exacerbating the gap between rich and poor, and contributed to the political malaise that saw Conservative victory in 2019.</p>
<p>Even more serious, the UK has an <a href="https://www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/populationestimates/articles/overviewoftheukpopulation/january2021">ageing population</a>. This will put a further strain on the public finances, necessitating much higher spending in health and social care than is currently proposed, and also hitting pensions (public and private).</p>
<p>Finally, the government must finance the rapid decarbonising of the economy to prevent catastrophic climate change. This is something that Sunak has shown little predilection to do, despite the UK hosting the <a href="https://ukcop26.org/">COP26 summit</a> in November.</p>
<p>Rishi Sunak has demonstrated a real political savvy in these difficult times that may well boost his chances of succeeding Boris Johnson as prime minister and ensure a Conservative victory in the next general election. But his real place in history will depend on how he responds to the extraordinary challenges of the age. Winning the argument over higher funding for social care is important, but it’s just one of many financial conundrums that the government has to overcome.</p><img src="https://counter.theconversation.com/content/167399/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Steve Schifferes does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>With an ageing population, pandemic recovery and climate emergency in the in-tray, social care is not the only thing the chancellor has to finance.Steve Schifferes, Honorary Research Fellow, City Political Economy Research Centre; Professor of Financial Journalism, 2009-2017, City, University of LondonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1665132021-08-22T12:18:26Z2021-08-22T12:18:26ZWhy Edgar Lungu and his party lost Zambia’s 2021 elections<figure><img src="https://images.theconversation.com/files/417234/original/file-20210820-23-ksl8vn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Zambia's new president Hakainde Hichilema.</span> <span class="attribution"><span class="source">Photo by Patrick Meinhardt / AFP via Getty Images</span></span></figcaption></figure><p>Hakainde Hichilema’s <a href="https://www.bbc.com/news/world-africa-58226695">election victory</a> is the third time an opposition leader has unseated an incumbent president in Zambia <a href="https://www.nytimes.com/1991/11/02/world/zambian-voters-defeat-kaunda-sole-leader-since-independence.html">since 1991</a>. The victory bequeaths on the new president and his party, the United Party for National Development (UPND), the immense task of restoring the rule of law, fixing the ailing economy and uniting a divided nation.</p>
<p>Hichilema won the poll with 59.38% of the vote. He secured a 1 million-vote lead over his closest rival and incumbent, Edgar Lungu of the Patriotic Front. Lungu polled <a href="https://zambiaelections2021.org.zm//home/results_by_constituency">38.33%</a>.</p>
<p>The election was effectively a referendum on Lungu and the conduct of his party during his tenure from 2015 to 2021. Zambians opted to believe in the campaign promises of his opponent. Hichilema promised to <a href="https://africanarguments.org/2021/06/hakainde-hichilema-zambians-want-change-we-dont-count-how-many-times-we-run/">grow the economy</a> to alleviate people’s suffering, restore the rule of law, <a href="https://www.theafricareport.com/94754/zambias-hakainde-hichilema-weve-never-seen-such-levels-of-corruption/">end corruption</a> and that, unlike his opponents, he was not contesting to secure a job.</p>
<h2>Contested candidacy</h2>
<p>Lungu’s candidature was controversial and highly contested. He completed his predecessor, the late <a href="https://www.brookings.edu/blog/africa-in-focus/2014/10/30/the-death-of-president-michael-sata-and-issues-of-the-health-of-african-leaders/">Michael Sata’s</a> unfinished term in 2016. He then served a full five-year term after beating, Hichilema in elections held that same year <a href="https://www.electionguide.org/elections/id/2884/">by a narrow margin</a>. </p>
<p>In 2021 Lungu was contesting for office in what some argued would effectively be a third term. The Constitutional Court was thrice petitioned to declare him ineligible. The court ruled in Lungu’s favour on all the occasions. It found that he had <a href="https://www.reuters.com/world/africa/zambian-court-throws-out-second-challenge-lungu-re-election-bid-2021-06-11/">served only a year</a>, not a full presidential term, between 2015 and 2016 after Sata’s death. This made him eligible to contest the polls in 2021. </p>
<p>In the end it was the ballot box that ended his tenure. The arrogance of power displayed by the Patriotic Front in defying the concerns of the country’s citizens in the way it ran the affairs of state drove voters to voice their displeasure.</p>
<p>There were a number of reasons the electorate decided to back his opponent.</p>
<p>Zambians were irked by the decline of democracy under Lungu, as shown by intimidation, harassment and arrests of members of the <a href="http://archive.ipu.org/hr-e/196/zambia.pdf">oposition</a>, and <a href="https://www.news24.com/channel/Music/News/activist-musician-who-fled-to-south-africa-arrested-as-he-arrives-home-in-zambia-20180517">critics</a> of the government. <a href="https://www.amnesty.org/en/latest/news/2020/03/zambia-activists-in-court-on-escalating-crackdown-on-human-rights/">Human rights violations</a> were on the rise.</p>
<p>In December 2020, a state prosecutor and a United Party for National Development supporter were <a href="http://www.hrc.org.zm/index.php/multi-media/news/369-hrc-calls-for-inquest-to-establish-identity-of-individuals-responsible-for-shooting-to-death-of-a-state-prosecutor-and-a-suspected-upnd-sympathiser">shot dead</a> when police fired on a crowd that had gathered near police headquarters to protest the harassment of Hichilema.</p>
<p>The Lungu government even tried to amend the constitution. Experts said this would have taken parliament’s oversight over the executive, creating a <a href="https://scholarship.law.cornell.edu/sajpd/vol5/iss1/7/">constitutional dictatorship</a>.</p>
<p>Levels of <a href="https://www.u4.no/publications/zambia-overview-of-corruption-and-anti-corruption-2020">corruption</a> also reached unprecedented levels.</p>
<p>In 2018, the Financial Intelligence Centre reported acts of corruption estimated at about <a href="https://www.fic.gov.zm/component/attachments/download/64">$284 million</a>. That same year, Finland, Ireland, Sweden and the UK withheld aid worth about <a href="https://www.reuters.com/article/us-zambia-corruption-idUSKCN1VH1S7">$34 million</a> because they were concerned about corruption and financial mismanagement.</p>
<p>In 2019, the <a href="https://www.fic.gov.zm/component/attachments/download/95">money laundering and terrorist financing trends report</a> of Zambia’s Financial Intelligence Centre disclosed that public officials had influenced the awarding of contracts. Corruption linked to public sector procurement was a major contributor to proceeds of crime. </p>
<h2>Misplaced priorities</h2>
<p>Zambians went to the 2021 polls in the midst of a <a href="http://saipar.org/wp-content/uploads/2020/03/Charles.Lascu_.AFRODAD-1.pdf">second debt crisis</a> created under the Lungu government. The <a href="https://www.themastonline.com/2021/02/20/its-true-cost-of-living-has-gone-up-says-wina/">cost of living</a> had also soared as the <a href="https://www.bloomberg.com/news/articles/2021-05-27/zambian-inflation-jumps-to-18-year-high-on-meat-and-fish-prices">annual inflation rate</a> was the highest in about two decades.</p>
<p>Lungu built his campaign on the <a href="https://chinaafricaproject.com/2021/08/09/president-edgar-lungu-commissions-new-chinese-built-airport-as-part-of-a-last-minute-campaign-push/">physical infrastructure</a> his government put up and increased <a href="https://www.reuters.com/article/ozabs-uk-zambia-economy-idAFKBN28R1LU-OZABS">government control</a> of Zambia’s mines.</p>
<p>He promised to roll out more infrastructure if reelected. But for many in Zambia economic conditions were tough. The economy got worse and many remained <a href="https://www.theafricareport.com/100265/zambia-will-the-economic-slide-hurt-lungu-in-the-august-polls/">jobless and disgruntled</a> on his watch. </p>
<p>Unemployed young people and households <a href="https://www.jctr.org.zm/uploads/1/1/8/1/118170975/final_bnnb_statement_11.08.2021.pdf">struggling</a> to meet basic needs against escalating prices of essential commodities <a href="https://cuts-lusaka.org/pdf/policy-brief-are-zambians-feeling-the-crunch-a-perception-survey-of-debt-and-the-economy.pdf">blamed the government</a> for the worsening conditions.</p>
<p>Some analysts attributed Zambia’s economic woes to <a href="https://www.ft.com/content/707aed78-27ef-4e11-95a3-792b2b91da55">undisciplined debt accumulation</a> to <a href="https://www.cmi.no/publications/6866-zambias-looming-debt-crisis-is-china-to-blame">finance the projects</a> Lungu boasted about.</p>
<p>The combination of high government debt and a weak economy meant that Zambia couldn’t service its debts. Lungu’s government had a fallout with international financial markets after it defaulted on debt repayment <a href="https://www.cnbc.com/2020/11/23/zambia-becomes-africas-first-coronavirus-era-default-what-happens-now.html">in 2020 </a>. The International Monetary Fund (IMF) had refused to bailout Zambia in 2016 over concerns about <a href="https://www.dw.com/en/zambia-braces-for-imf-crunch-talks/a-56496748">government’s commitment</a> to economic reforms.</p>
<p>The IMF <a href="https://www.reuters.com/article/imf-zambia-idUSL1N2MX1J1">resumed talks</a> with Zambia to <a href="https://www.reuters.com/article/imf-zambia-idUSL1N2MX1J1">reform the economy</a> in February 2021, but a deal was <a href="https://www.theafricareport.com/66687/zambia-imf-debt-talks-unlikely-to-stop-lungu-from-trying-to-pawn-copper-to-china/">unlikely</a> until after the election. </p>
<h2>Failed reelection strategy</h2>
<p>In <a href="https://www.theafricareport.com/100265/zambia-will-the-economic-slide-hurt-lungu-in-the-august-polls/">past elections</a> the Patriotic Front used infrastructure and the tribalism trump card to beat Hichilema. </p>
<p>But, this failed in 2021. </p>
<p>While Hichilema maintained popularity in his traditional stronghold in Zambia’s south-west region, he also broke into Lungu’s stonghold in the north-east, and gained unprecedented support. His campaign message to end corruption, restore the rule of law and the economy resonated among the majority of voters across Zambia.</p>
<p>His pick of Vice President and running mate in <a href="https://www.pindula.co.zw/Mutale_Nalumango">Mutale Nalumango</a> also helped him break into Lungu’s core constituency. The educator and former vice president of the Secondary Schools’ Teachers Union of Zambia served as Movement for Multiparty Democracy Member of Parliament for Kaputa in Northern Zambia from 2001 to 2011. </p>
<p>Hichilema’s break into Lungu’s core constituency saw Lungu <a href="https://www.rfi.fr/en/africa/20210815-zambia-election-president-cries-foul-as-opposition-leads-in-early-vote-count-lungu-hichilema-unfair">cry foul</a> that the 2021 election was not free and fair.</p>
<h2>Restoring a fractured country</h2>
<p>Hichilema has his work cut out for him. He has to endear himself to the whole country and prove that he is a national leader. This will enable him to clear his name of accusations that he is a <a href="https://www.lusakatimes.com/2021/04/07/distinguishing-the-tribe-from-the-tribalist-every-tribe-is-good-but-every-tribalist-is-bad-the-dying-of-upnd/">tribalist</a>. </p>
<p>He also faces the daunting task of undoing the culture of violence and extortion in the political arena by party “cadres” - unemployed men who extort money, provide informal security for party elites, and disrupt opposition events. Hichilema will have to tame his own party cadres, and restore sanity through impartial application of the law to set Zambia back on the path of democratic consolidation. </p>
<p>The task that will make or break Hichilema’s leadership, however, is fixing the economy. He has spoken large about this since he stepped on to the political stage, claiming he was best suited to fix Zambia’s economic problems. </p>
<p>Potential supporters of Zambia’s economy, such as the IMF, demand <a href="https://www.imf.org/en/News/Articles/2021/03/04/pr2159-zambia-imf-staff-completes-virtual-mission-to-zambia">austerity</a> to restore its economic fortunes and set it on a path of recovery. Hichilema will have to balance austerity and the high expectations of the many unemployed young people and struggling people who voted for him.</p><img src="https://counter.theconversation.com/content/166513/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Chris Changwe Nshimbi does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Zambia’s new president will have to balance austerity and the high expectations of the many unemployed young people and struggling people who voted for him.Chris Changwe Nshimbi, Director & Research Fellow, University of PretoriaLicensed as Creative Commons – attribution, no derivatives.