Rishi Sunak’s government has been warned that Britain’s creaking public services will require at least £43bn a year in additional funding to “stand still” amid the fallout from soaring inflation.
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The Trades Union Congress said next week’s autumn statement needed to protect 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 (NEF), the TUC said that if current trends continued, spending on public services would need to increase by at least 4% a year – or £43bn – in real terms over the next five years just to maintain current levels of service.
However, the TUC said that even this level of funding would not be enough to address the growing backlog of repair and maintenance work in areas such as housing, transport and flood defences, which it said was estimated to have reached £170bn.
In a submission to the chancellor ahead of next week’s statement, the TUC said that while it welcomed the additional funding for public services announced in last month’s spending review, this would not be enough to meet the scale of the challenge facing Britain after years of austerity.
The TUC general secretary, Frances O’Grady, said: “Soaring inflation is a huge threat to public services and workers’ pay packets. The chancellor must use the autumn statement to protect us from the worst of it.
“This means boosting investment in our vital public services so that they can keep up with rising costs and repair the damage caused by years of austerity. And it means supporting low-paid workers by increasing the minimum wage and protecting in-work benefits.”
The NEF said its research showed that if current trends continued, spending on health would need to increase by £17bn a year, on education by £7bn, and on social care by £4bn to maintain current levels of service.
Joe Dromey, the NEF’s research director, said: “The pandemic has laid bare the consequences of a decade of austerity and underinvestment in our public services. The government now faces a choice: either continue with austerity by stealth or commit to the sustained investment our public services desperately need.”
In addition to the £43bn a year needed for public services, the TUC said the government also needed to increase spending on benefits by £5bn a year to keep up with inflation and prevent millions of families from being pushed into poverty.
It called on Sunak to use next week’s statement to increase the minimum wage to at least £10 an hour and raise in-work benefits such as tax credits and universal credit in line with inflation.
O’Grady said: “The last thing our economy needs is workers to be pushed into poverty. The chancellor must ensure that minimum wage increases and in-work benefits keep pace with inflation, so families can make ends meet.”
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This content is well-written and informative. It presents a clear argument for why the government needs to increase funding for public services and workers’ pay. Additionally, it provides background information on the issue and cites research to support its claims. Overall, this content helps understand the potential impact of inflation on public services and workers’ pay.
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