NHS 'should share burden of cuts'
A report has called for over £90 billion reductions in Government spending by 2015, and says the NHS should take its share of the burden of cuts.
Chancellor George Osborne is due to put a figure on the overall reduction in the Government's £670 billion annual expenditure needed to repair the hole in Britain's public finances when he delivers his emergency budget on June 22.
But Prime Minister David Cameron has already committed the Government to defending the NHS, along with schools and overseas aid, from cuts, and few commentators expect the axe to fall as heavily as the report by the Adam Smith Institute (ASI) think tank recommends.
The report The Party is Over - A Blueprint for Fiscal Stability argues the Government should eliminate Britain's deficit over the course of this Parliament in order to avoid a Greek-style collapse in confidence.
Author Nigel Hawkins calculates that this would involve reductions in public spending of 3% a year across all Whitehall departments over the next five years - equating to around £20 million a year.
He argues that no budget should be ring-fenced and that even the health budget should be subject to an annual reduction of around 2% a year. Further cuts would have to be made within the current year, beyond the £6 billion already announced by Mr Osborne, in order to reach the goal of eliminating the deficit. The report calls for Cabinet ministers to be sacked if they are unable to deliver the necessary savings.
Mr Hawkins, a City economist and ASI senior fellow, said: "Some economists say we should delay reducing the deficit until the economy has recovered, but our view is that the financial risks of deferring public expenditure cuts - including a possible run on the pound - far outweigh the risks of depressing the economy. As the plight of Greece demonstrates, there is one compelling priority for the new coalition government - deficit reduction."
Eamonn Butler, the director of the Adam Smith Institute, added: "Quite plainly some very large reductions in public expenditure are going to be necessary over the next five years - that is the unavoidable consequence of the last government's fiscal incontinence. But the good news is that countries like Canada and Sweden have shown us how it can be done.
"We need to look beyond cuts, and actually think about far-reaching reform. The key is to fundamentally rethink the role of the state. What do we really need government to do? And what is the best way to do it?
"These are the questions the Comprehensive Spending Review must ask if our fiscal problems are to be solved in the long run."