The Week, 25 November 2016

25 November 2016

This week’s Autumn Statement signalled a series of important changes to macroeconomic policy. With the Office for Budget Responsibility (OBR) forecasting a Brexit-induced slowdown, the Treasury established a new, laxer fiscal framework. The Chancellor used this headroom to increase infrastructure expenditure, but with the exception of the prison service, there was no spending boost for public services.

The Chancellor also announced that the NHS ringfence and State Pension triple lock – a significant cause of long-term fiscal instability – will be reviewed at the next Spending Review. The decision was widely interpreted as the first indication that the Conservatives might scrap their commitment to the triple lock in time for the next General Election.

Will Mosseri-Marlio, Senior Researcher

 

Reformer of the week

Rt Hon Philip Hammond MP, Chancellor of the Exchequer, who announced in his first Autumn Statement that it would also be his last. In a policy backed by the International Monetary Fund, the Treasury will now move to one fiscal event a year –  an autumn Budget. The new arrangement will give parliamentarians more time to scrutinise government proposals ahead of the start of the financial year.

Reactionary of the week

Philip Hammond MP, who found only £1 billion over five years to partially compensate for the forthcoming cuts to Universal Credit. The landmark welfare reform will only transform labour market incentives if the benefit is better funded.

Good week for…

Digital health

On Monday, Royal Free London NHS Foundation Trust announced it would be partnering with the artificial intelligence arm of Google to reduce the amount of resource the hospital currently spends on paperwork.

Infrastructure spending

On Wednesday, the Chancellor unveiled the National Productivity Investment Fund, a £23 billion initiative that will boost transport, digital communications, research and development and housing.

Staying the course

On Wednesday, the Chancellor rejected calls for increased expenditure on the health service, a move that will keep up pressure on NHS leaders to improve efficiency.

Bad week for…

Fiscal rules

On Wednesday, the Chancellor scrapped the fiscal rules of his predecessor. The Treasury will now be guided by a looser borrowing and debt framework.

Productivity

On Wednesday, the OBR again downgraded the UK’s productivity outlook, citing concerns regarding weak business investment.

Child protection

On Friday, Her Majesty’s Inspectorate of Constabulary highlighted systemic failings in the Metropolitan Police’s handling of child protection and abuse cases.

Quotes of the week

“I can confirm that, despite the fiscal pressures, we will meet our commitments to protect the budgets of key public services and defence; we will keep our promise to the world’s poorest through our overseas aid budget, and we will meet our pledge to our country’s pensioners through the triple lock.

But as we look ahead to the next Parliament, we will need to ensure we tackle the challenges of rising longevity and fiscal sustainability.

And so the government will review public spending priorities and other commitments for the next Parliament in light of the evolving fiscal position at the next Spending Review..”

Philip Hammond MP, delivering his Autumn Statement on Wednesday

“Regrettably, the Chancellor is still going ahead with some of the cuts to universal credit. Thanks to pressure – I pay tribute to Members of all parties who have campaigned on this issue – he is offering to soften the blow. We do not want the blow softened; we want it lifted altogether. Today’s changes will leave a single parent on average at least £2,300 worse off. These are the very people who are working hard to deliver for their families, and the Government are betraying them.”

The Rt Hon John McDonnell MP, Shadow Chancellor of the Exchequer, responding to the Autumn Statement on Wednesday

“The existing convention-based budget process is largely uncodified, allows the budget to be presented just before the start of the financial year, forces Parliament to approve the budget well into the fiscal year to which it refers, and has seen the Autumn Statement become, in effect, a mini-budget which sometimes [dwarfs] the Budget itself in fiscal significance. Frequent changes in fiscal policy objectives make it difficult for the general public to fully grasp details of the design and implementation of fiscal policy through the budget.

The International Monetary Fund makes the case for scrapping the Autumn Statement earlier this month

Reform’s week

Events

On Wednesday, Reform held a private policy dinner on the challenges and opportunities for growth after Brexit with the opening remarks delivered by Crispin Blunt MP, Chair of the House of Commons Foreign Affairs Committee.

Media

On Wednesday, Will Mosseri-Marlio, Senior Researcher at Reform, wrote an article for Public Finance, responding to the Chancellor’s Autumn Statement and highlighting the shifts in the borrowing and debt targets.

On Thursday, Andrew Haldenby, Director at Reform, wrote an article in the Telegraph, arguing that small operational improvements were as important to the NHS as root and branch reform.

The Reformer blog

On Monday, Ben Dobson, Researcher at Reform, wrote the first in a series of blogs about rewarding employment, arguing that greater integration and more devolution could help support those who are “just managing”.

Also on Monday, Gemma Marsh, Director of Skills and Employment at Greater Manchester Combined Authority, set out how Greater Manchester plans to deliver an integrated work and skills system in order to achieve sustainable employment.

Also on Monday, Barry Fletcher, Chief Operating Officer at Ingeus UK, highlighted the importance of integration in the delivery of employment services.

On Wednesday, Andrew Haldenby, Director at Reform, commented that the Autumn Statement’s overall message reinforced reform to public services..

On Thursday, Eleonora Harwich, Researcher at Reform, wrote a blog on the future of applications and impact of artificial intelligence in public services, such as in diagnosing patients and tailoring education programmes.

Upcoming events

On Monday, in partnership with Hewlett-Packard Enterprise, Reform will hold a private policy roundtable led by Sam Gyimah MP, Minister for Prisons and Probation, about integrating criminal justice reform.

On Wednesday, in partnership with Arvato, Reform will hold a private policy roundtable led by Gareth Rhys Williams, Government Chief Commercial Officer in the Cabinet Office, about improving government procurement to ensure value for money.

On Thursday, Reform will hold another private policy dinner on the challenges and opportunities for growth after Brexit, with the opening remarks this time delivered by the Rt Hon Peter Lilley MP, Former Shadow Chancellor of the Exchequer and Secretary of State for Social Security.

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