Impact of cuts ‘not understood’

Published: Tuesday 17th March 2015 by The News Editor

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Whitehall officials have inflicted deep public spending cuts without fully understanding their impact on services, the head of Britain’s value-for-money watchdog has said.

Auditor General Sir Amyas Morse said that “radical surgery” had been carried out as part of the Government’s austerity programme without officials knowing “where the heart was”.

The National Audit Office chief suggested that an “optimism bias” within David Cameron’s administration had led to ministers pressing ahead with reforms to services like the NHS with limited discussion of the potential risks.

Sir Amyas told the Financial Times: “If you’re going to do radical surgery, it would be nice if you knew where the heart was. You’re slightly more likely not to stick a knife in it by mistake.”

The NAO boss, who reports directly to Parliament rather than the Government, pointed to cuts to local authority budgets which had resulted in a reduction in money available for social care, with knock-on effects on the NHS.

“Now if you’re going to go through much deeper, more profound organisational cuts . . . you need to understand what you’re doing better than that,” he said.

Whitehall civil servants had “a responsibility to be much better informed at the centre” about the impact of reforms, rather than leaving local government to deal with the fallout, he said.

Business Secretary Vince Cable said that Sir Amyas’s comments were “a very salutary warning”.

Mr Cable told the BBC: “I think he is right to say what he has said. I think within this Parliament we have managed this very carefully, but there isn’t very much low-hanging fruit. There isn’t going to be scope for deep cuts without doing serious damage.

“That’s why the Liberal Democrats are arguing there’s got to a much better balance between spending and tax changes in relation to the deficit and we’ve got to do this in a very measured way.”

David Cameron’s official spokesman said that the NAO did “very important work” in scrutinising how taxpayers’ money is spent.

Responding to Sir Amyas’s comments, the spokesman said: “As the Prime Minister and other ministers have said, in dealing with the deficit, this Government has had to take difficult decisions.

“The Government has gone about it in a way that demonstrated clarity about its priorities – for example in relation to the protection of the NHS budget – alongside a reform agenda in a number of areas of public services.

“This is a Government that has been clear about its priorities and clear about the way it is dealing with the public finances. I think those are the points the Prime Minister would probably make.”

Published: Tuesday 17th March 2015 by The News Editor

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