Key findings

  • Underpinned by an assessment that it must both deliver a surplus in order to reduce debt and do so via spending cuts, the government is set to reduce the size of the state towards historic lows
  • Subjective choices about the split between DEL and AME, consumption and investment and different services and groups fundamentally alter the shape of the state over time
  • In particular, the nature of the post-crisis consolidation – allied with demographic changes – is serving to increase the share of overall spending on older people and health while reducing the share going to working-age families and economic growth
  • This may or may not be the right balance to strike, but there is a danger that we fail to check in on these developments until after they occur – what do we want the state to do?

Further reading

Summer Economic Update July 2020
Resolution Foundation overnight analysis
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Resolution Foundation Analysis
The Macroeconomic Policy Outlook Q2 2020
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James Smith, Tony Yates
Public finances under pressure
Lessons for policy makers from April’s public finance figures
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Torsten Bell, Charlie McCurdy, Cara Pacitti
Matthew Whittaker
Matthew Whittaker Deputy Chief Executive
Adam Corlett
Adam Corlett Senior Economist
David Finch
David Finch Senior Research Fellow