Rishi Sunak’s government has been warned that Britain’s creaking public services will require at least £43bn a year in additional funding just to “stand still” amid the fallout from soaring inflation.
The Trades Union Congress said next week’s autumn statement needed to protect both public services and workers’ pay from the highest rates of inflation since the early 1980s to avoid a further collapse in the quality of support for health, social care, education, justice, and the environment.
Drawing on research from the New Economics Foundation thinktank, it said the chancellor, Jeremy Hunt, would need to provide £43bn a year in today’s prices by 2024-25 to ensure adequate protection for public services after years of cuts.
With inflation at 10.1%, the highest level since 1982, it warned there was now a significant shortfall in the spending firepower of each government department compared to the funding settlements they were given in 2021 when Sunak was chancellor.
“The economic crisis of 2022 means public services budgets are now worth far less due to higher prices,” the TUC and NEF said in a report, while warning Sunak that he had told parliament that world-class public services were “the people’s priority”.
According to the report, health and social care is facing the biggest shortfall in funding after the inflationary burst, with the health service facing a gap of £15.7bn a year by 2024-25 against the 2021 spending review commitment.
Education will face a £7.1bn shortfall compared to its spending review settlement, while there are also shortfalls for the justice department, as well as environment, food and rural affairs.
Frances O’Grady, the TUC general secretary, said public services had been left short-staffed and overwhelmed after more than a decade of austerity.
“Now the double whammy of soaring inflation and the Tories’ catastrophic mini-budget has pushed them to the brink,” she said.
“As chancellor, the new prime minister must keep his promise that he will fund ‘world-class public services’. Our NHS, schools and public services must not be collateral damage to the Tories crashing the economy in 2022.”
A Treasury spokesperson said restoring economic stability and confidence that the UK is a country that pays its way was the government’s “number one priority”.
“The prime minister and chancellor have been clear that this will require some difficult decisions, but protecting public services and the most vulnerable will be prioritised.”