ESRC Public Services Programme holds seminar at HMTreasury

The ESRC Public Services Programme held a Seminar at HM Treasury on 4 November 2008 entitled ‘Public Services in a Time of Fiscal Constraint`.

The seminar was chaired by James Richardson, the Treasury`s Director of Spending, and was attended by Treasury public spending experts.

Christopher Hood (PSP Director) discussed policy choices from a historical perspective, taking examples from the 1920s - when public spending was cut by one-quarter by the infamous ‘Geddes` Axe` -and the 1970s when major cuts were made in public sector employment but without corresponding cuts in expenditure.

Carl Emmerson (Institute for Fiscal Studies) showed that in recent decades, public spending has followed the ups-and-downs of the economic cycle, with governments spending relatively more on public services as a percentage of GDP when the output gap is positive - that is, when the economy is growing. Maintaining expenditure in more straitened times would represent a break from this pattern, and implies increased government debt.

The discussion covered a variety of questions, including: Is it possible to constrain the growth of health spending? What can we learn from the past about new expenditure control mechanisms that tend to go with changes in public spending policy? In periods of fiscal constraint, how can we preserve learning capacity and investment in future developments?

A senior official described the seminar as ‘very stimulating, lots of food for thought, no easy answers`.

The Programme is pursuing the idea of holding follow-up seminars.

Please visit the Programme`s website for more information.