Spending cuts are often false economies that end up costing society dearly

Every government looks to save money. Sometimes, it’s a priority to reduce spending, as with post-2010 austerity. Even when overall spending is rising, politicians may reduce spending in one area to make progress on a priority elsewhere. Doing things more efficiently is always a good idea.

But announcing a spending cut is not the same as reducing spending, let alone achieving value for taxpayers’ money. That is a key lesson of the austerity years. Cuts announced in haste in one area today have repeatedly led to costs ballooning elsewhere tomorrow.

Cash-starved social care harms those in need, but also costs us a fortune when we can’t discharge from hospital those who could be at home with the right support. Treasury attempts to cut their housing benefit bills, by freezing support in line with 2019 rent levels, even as rents soared, drove homelessness to record highs (145,800 children are now in temporary accommodation) leaving some, already stretched, councils seeing their temporary accommodation spend rise by nearly 40% last year.

A new study, by the lnstitute for Fiscal Studies, looking at the effects of shutting 70% of police stations in London during the 2010s, found that violent crimes (assaults and murders) increased 11% in neighbourhoods where stations closed. They found that for each pound “saved”, it raised costs faced by society by £3.

Difficult decisions can’t be avoided, but it’s time to wake up to the fact that getting genuine value for money for taxpayers is a lot harder than announcing grand cuts today, only to leave others to pick up the pieces later. With government implying post-election cuts of 13% in some departments, this is what needs to be considered.

Torsten Bell is chief executive of the Resolution Foundation and author of the forthcoming book Great Britain? How We Get Our Future Back

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