Monday, August 09, 2010

Britain Begins to Feel Austerity Cuts

LONDON — Last month, the British government abolished the U.K. Film Council, the Health Protection Agency and dozens of other groups that regulate, advise and distribute money in the arts, health care, industry and other areas.

It seemed shockingly abrupt, a mass execution without appeal. But it was just a tiny taste of what was to come.

Like a shipwrecked sailor on a starvation diet, the new British coalition government is preparing to shrink down to its bare bones as it cuts expenditures by $130 billion over the next five years and drastically scales back its responsibilities. The result, said the Institute for Fiscal Studies, a research group, will be “the longest, deepest sustained period of cuts to public services spending” since World War II.

Until recently, the cuts were just election talking points, early warnings of a new age of austerity. But now the pain has begun. And as the government begins its abrupt retrenchment, the implications, complications and confusions in the process are beginning to emerge.

“It feels like they’re just sticking a finger in the air and guessing,” John Mutton, leader of the City Council in Coventry, said of the government’s methods for deciding which programs to cancel and which to cut.

In June, the government announced its first round of cuts, removing about $10 billion from the current year’s budget.

While that is a drop in the bucket compared to the final goal, the reduction measures have already had severe consequences. Public sector workers across the country, except for the lowest paid, will have their salaries frozen for the next two years. Oxfordshire, facing a nearly $1 million trim in its road safety budget, has been forced to shut down all its 161 traffic speed cameras.

The cuts mean that Nottinghamshire plans to close three recycling facilities and some of its day care centers. And that the city of Coventry, which already cut spending in January, is trying to find $5.6 million more to cut from its current child services budget.

But none of this is much compared to what the country will face when the government issues its long-term budget plans in October. Mr. Mutton, the Coventry official, predicted that the next round of cuts would cost the city at least 10,000 jobs in the public and private sectors. Analysts have estimated that some 600,000 public-sector jobs could be lost nationwide.
Read the rest here.

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