Philip Hammond’s message to public services

23 November 2016

Philip Hammond clearly enjoyed delivering his first, and last, Autumn Statement. Reading between the lines, he had some important things to say on public spending and public services:

He will keep the ring-fenced budgets, and the triple lock on pensions, until the next Spending Review. That may open the door to a change in those policies before the next Election.

In the face of a concerted campaign, he has refused any extra money for the NHS. The onus is now squarely on the Service to deliver the efficiencies promised in the Five Year Forward ViewReform has clearly written a good deal about this, even today in the Telegraph.

He made a bold statement that the goals of excellent public services and sustainable public finances can be achieved together (“We have demonstrated beyond doubt that controlling public spending is compatible with world-class public services and social improvement.”) He went on to contradict himself, somewhat, by confirming emergency spending and staff for prisons.  Still, it was a clearer statement of the idea than George Osborne ever made, and gives a strong sense of his position.

He wants the Treasury to incentivise other departments to make savings. To begin with, government departments will retain a third of the £3 billion of savings required under the current Efficiency Review.

Devolution remains a big theme but also a work in progress, far from completion. Real devolution would mean greater local control of taxation, yet the devolution and taxation chapters are firmly separated in the Autumn Statement documents.

For services such as the NHS, the Chancellor’s message is “let me help you reform” rather than “here is more money”.  That is not quite what the BMA and others wanted to hear.

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