LONDON: British finance minister Rachel Reeves’ key decision in next week’s multi-year spending review will be how much to spend on health care versus other public services, the Institute for Fiscal Studies think tank said on Sunday.
Reeves is due to set out day-to-day spending limits for other government departments on June 11 which will run through to the end of March 2029 — almost until the end of the Labour government’s expected term in office.
Britain has held periodic government spending reviews since 1998, but this is the first since 2015 to cover multiple years, other than one in 2021 focused on the COVID pandemic.
The non-partisan IFS said this spending review could prove to be “one of the most significant domestic policy events” for the current Labour government.
Prime Minister Keir Starmer’s announcement in February that defense spending would reach 2.5 percent of national income by 2027 had already used the room for further growth in public investment created in Reeves’ October budget, it said.
“Simultaneously prioritising additional investments in public services, net zero and growth-friendly areas ... will be impossible,” said Bee Boileau, a research economist at the IFS.
Non-investment public spending is intended to rise by 1.2 percent a year on top of inflation between 2026-27 and 2028-29, according to budget plans which Reeves set out in October — half the pace of spending growth in the current and previous financial year.
The IFS sees no scope for this to be topped up, as Reeves’ budget rules leave almost no room for extra borrowing and tax rises are now limited to her annual budget statement.
This forces Reeves and Starmer to choose between the demands of the public health care system — plagued by long waiting times and a slump in productivity since the COVID-19 pandemic — and other stretched areas.
In past spending reviews, annual health care spending has typically risen 2 percentage points faster than total spending.
If that happened this time — equivalent to an annual increase of 3.4 percent — spending in other departments would have to fall by 1 percent a year in real terms, the IFS forecast.
Raising health care spending at roughly the same pace as other areas — a 1.2 percent rise — would only just keep pace with an aging population and not allow any reversal of recent years’ deterioration in service quality, the IFS said.
Spending cuts could be achieved by scaling back services provided by the state, reducing public-sector employment or real-terms cuts in public-sector pay, it added.
But it warned the government needed to be specific about how it planned to make cuts, or risk financial markets losing confidence in its ability to keep borrowing under control.
The review does not cover spending on pensions or other benefits, which the government is tackling separately.
UK faces choice next week between health and other spending, IFS think tank warns
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UK faces choice next week between health and other spending, IFS think tank warns
- The non-partisan IFS said this spending review could prove to be “one of the most significant domestic policy events” for the current Labour government
Russia says captured Ukraine’s Siversk in key eastern region
- The Russian army in Ukraine is “confidently advancing along the entire front,” Putin said
- He said last month his troops were advancing on Siversk, home to around 11,000 residents
MOSCOW: Russia said Thursday its troops had seized full control of Siversk, a Ukrainian city in the eastern Donetsk region where fighting has intensified in recent weeks, though Ukraine denied the key settlement had been lost.
The Russian army has been slowly but steadily grinding through eastern Ukraine and taking ground from outnumbered and outgunned Ukrainian forces, with some of the fiercest battles taking place in Donetsk.
Russia’s military chief of staff, Valery Gerasimov, said Moscow’s forces had captured Siversk in a report to President Vladimir Putin during a televised meeting with army commanders.
The Russian army in Ukraine is “confidently advancing along the entire front,” Putin said, thanking the commanders and soldiers “for their combat work.”
Putin said last month his troops were advancing on Siversk, home to around 11,000 residents before the war, claiming that the Russian offensive was “practically impossible to hold back.”
The Ukrainian army’s eastern command denied Russian claims it had taken Siversk, saying that it “remains under the control of the Armed Forces of Ukraine.”
“The enemy is trying to infiltrate Siversk in small groups, taking advantage of unfavorable weather conditions but most of these units are being destroyed on the approaches,” it added in a Facebook post.
Siversk is located about 30 kilometers (18 miles) east of Kramatorsk and Sloviansk, the last two major cities still under Ukrainian control in the Donbas — an industrial and mining region in Moscow’s sights.
Moscow earlier this month said it had captured Pokrovsk, a former road and rail hub also in Donetsk, but Kyiv claims fighting in the city is still ongoing.
Putin has said that Moscow is ready to fight on to seize the rest of the land it claims in eastern Ukraine if Kyiv does not give it up as part of a peace deal.
Eastern Ukraine has been ravaged since Russia launched its assault in February 2022, with tens of thousands of people killed and millions forced to flee their homes.
