Bogus public spending projections

Mike Denham has a very interesting TPA piece on bogus public spending projections. 


It’s taxpayers who foot the bill for bogus public spending projections

According to the OBR’s Budget forecast, public spending as a percentage of GDP will fall from 45.6 per cent this year to 44.7 per cent in 2031-32. For taxpayers that would be a small step in the right direction. But hardly anyone – probably including the OBR itself – actually believes the forecast. Because around half of future spending is almost certainly understated.

The spending ratio (Total Managed Expenditure – TME – as a percentage of GDP) has grown enormously during this decade. Even if the OBR’s forecast decline materialises, by 2031-32 it will still be 5.5 percentage points of GDP higher than in 2019-20, equivalent to £175 billion in today’s terms.

And we taxpayers should never forget that the funding burden falls almost entirely on our shoulders. For sure, part of it is debt financed, but that debt has to be serviced, and the OBR says the debt interest bill has mushroomed to £124 billion this year, rising to £160 billion – a heart-stopping £5,500 per household – in 2031-32.


The whole piece is well worth reading for what Denham says on public spending projections, but also as a reminder of wider issues around bogus government projections. 

For example, as public spending projections certainly are bogus, then why would anyone believe climate projections, Net Zero projections, HS2 projections?

To state the obvious, bogus public spending projections help nobody but politicians looking to kick that increasingly battered can a little further down the road. Much is made of satisfying the fiscal rules, but IMF praise notwithstanding, our rules are weak, and devaluing them further by understating the outlook for spending is asking for trouble. Which is why our government borrowing costs are already the highest in the G7.

As the TPA has long argued, spending is unsustainably high and needs to be reduced. But pretending that future spending will somehow be lower than current commitments and policies imply is the road to ruin. We desperately need policymakers who will deal with reality, not fantasy.

There is still some satisfaction in not watching it - does that count?

What has the BBC ever done for us? Corporation spent around £2million on promotional advert

The BBC spent an estimated £2million on this year's promotional advert amid its plans for huge job losses, The Mail on Sunday has discovered.

Critics have now accused bosses of 'frittering away public money' and urged them to spend on areas that really matter to the public such as quality programmes.

The 'What has the BBC ever done for me?' film starred comedian Romesh Ranganathan and featured more than 100 stars describing why they thought the broadcaster was important.

There is a point to be made here too, going beyond sarcasm, a certain satisfaction does come from not watching the BBC. 

Along with a mild sense of escape from the endless promotion of its State Broadcaster viewpoint, the nature of the BBC becomes more apparent, particularly the unidirectional nature of everything it churns out.

It's not that we never understood the limitations of the BBC, and leaving it behind isn't as striking as climbing to the top of a hill to take in a magnificent view, but it's there, the sense of moving on.

Pushing the proverbial peas around the plate

Maxwell Marlow has a useful CAPX reminder that the EU is in an even worse state than it was ten years ago. Hauling Brexit into the centre ground of UK political debates is merely distraction from the mess created by UK politicians.


The EU would strangle our economy. Why rejoin?

• Britain leads Europe in tech. The EU leads in regulating it
• Britain's dynamic start-ups would strongly resist rejoining the EU
• Brussels embraced the Draghi report, then implemented 15.7% of it

Andy Burnham is set to make the same mistake that led to the ruin of Keir Starmer: lack of a domestic agenda, other than pushing the proverbial peas around the plate on energy bills, bus fares and the like, paired – like a bottle of plonk – with ambiguous statements on the big public issues. To make up for the vacuousness, a debate has been opened on the EU front. Should the UK rejoin?

The whole piece is quite short but well worth reading. "Pushing the proverbial peas around the plate" is a useful description of the Burnham approach to politics too. It's probably why he's where he is now. 


For all of our problems, which as Britain’s most read wonk-blog, CapX leads on analysing and proposing solutions for, I would wager that subjecting ourselves to a fresh round of discord and instability would be more harmful to growth than carrying on with our current lot. We cannot allow ourselves as a polity to be sidetracked by politicians seeking to distract from the mess they have got us into, by suggesting another referendum. Or worse, a complete betrayal of the British people’s vote in 2016 with a decision by fiat to re-enter.

Just when you think you’re out

Marc Morano heads to Turkey for UN Climate Summit COP31:

“Just when you think you’re out — the U.S. midterm elections pull us back into the climate agenda. We are now at a crossroads in the climate change debate, which has been formally going on since the UN started its climate panel in 1988.

Decades of failure culminated in Donald Trump leading the world and rejecting the UN climate agenda. But the midterm elections are a major shot in the arm to the climate globalists’ plan to foist their anti-human and unscientific agenda back on the world.”

From a UK perspective, this will energise Ed Miliband and a host of other fantasists.

The absurdly meticulous reach of UK bureaucracy

Demolition plans emerge for some of Derby's oldest council homes but residents say they haven't been told

Dozens of Derby's oldest council homes could be demolished and rebuilt - but residents say they've not been told about the plan.

Derby City Council has confirmed a masterplan has been drawn up to redevelop around 70 homes on Bretton Avenue and Constable Lane. Housing bosses state the homes in Littleover remain structurally safe and pose no risk to residents living in them despite their age.

But the council homes - built soon after the Second World War - no longer meet national Decent Homes standards, meaning some form of redevelopment is necessary.

It is understood that some of the prefabs on Bretton Avenue would not be included in the redevelopment as they are privately owned.

I noticed this piece because in the early 1950s my aunt and uncle used to live in one of those prefabs on Bretton Avenue in Derby. That's not the reason for posting a link on the blog though. 

Instead, the Decent Homes Standard is worth a quick look as another indication of the absurdly meticulous reach of UK bureaucracy. 

Andrew Burnham thinks we need more of it too, via the EU. 

Two Headlines

Tower Hamlets seeks £140k digital chief ‘to lead one of the most significant digital transformation agendas in local government’

Tower Hamlets is offering a six-figure salary in a bid to recruit a new senior manager “ to lead one of the most significant digital transformation agendas in local government”.

The London borough is currently advertising the position of director of digital, data and technology. The role comes with a remit to develop a council-wide strategy aimed at “ensuring digital capabilities are embedded at the heart of organisational decision-making, service redesign and transformation”, according to the job advert.


Significant concerns raised over 'deteriorating' finances at Tower Hamlets Council

The east London council is on course to spend £19 million over its budget for the financial year ending in March 2027

A report by professional services firm EY said the budget-busting figure was “not consistent with effective financial planning and budgetary control”.

The circuit-breaker strategy

Minister tells energy suppliers to do more to help households tackle unpaid bills this winter

An energy minister has told the bosses of Great Britain’s biggest energy suppliers to do more to help households get on top of their unpaid energy bills this winter, before the government spends almost £2.5bn to help write off the country’s record high debts.

Energy bosses were summoned to a roundtable meeting on Thursday to discuss the government’s plan to pay down the energy debts of about 2.4m of the hardest-hit households.

The debt relief scheme is part of a wider “circuit-breaker” strategy put forward by the chancellor in the annual budget statement last month. This includes measures to tackle household energy debt, which could reach £7bn by the end of the year...

Suppliers are expected to proactively identify customers who may be under financial strain and offer help such as debt payment plans or pointing them in the direction of debt advice services.

The government is also planning to work with the industry to make it easier to spot households that may need extra help, and to modernise payment systems to make it easier to pay. The government has backed the use of smart meters and smart pre-pay meters to help households track their spending and avoid getting into arrears.


A "circuit-breaker strategy" is a remarkably unfortunate description of a government plan to help those in debt to energy suppliers. 

It sounds like a dollop of other people's money, debt payment plans, debt advice services and the old pre-payment meter idea. Something Ministers can point to when winter hardship stories pop up in the media. 

It's clearly aimed at defending Andrew Burnham's performance of  'The Decent Northern Bloke', but in practical terms does it all add up to a nothingburger? Without a reference to ditching Net Zero, it doesn't appear to offer much to anyone who isn't a Labour politician.