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Plan C - Slow growth and public service reform

Plan C - Slow growth and public service reform

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Published by The RSA
In the first of six papers, Nick Seddon (Deputy Director, Reform) asks whether faced with further retrenchment, will it be possible through public service reform to protect the most vulnerable and universal service standards and if so how? Does slow growth require a more profound shift in policy, expectations and culture? Might it even be possible for some things about our economy, society and culture to improve despite (or even because of) slow growth?
In the first of six papers, Nick Seddon (Deputy Director, Reform) asks whether faced with further retrenchment, will it be possible through public service reform to protect the most vulnerable and universal service standards and if so how? Does slow growth require a more profound shift in policy, expectations and culture? Might it even be possible for some things about our economy, society and culture to improve despite (or even because of) slow growth?

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Categories:Types, Research
Published by: The RSA on Jun 21, 2012
Copyright:Attribution Non-commercial

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06/21/2012

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12
 TIME FOR A PLAN C?
SLOW GROWTHAND PUBLICSERVICE REFORM
NICK SEDDONMAY 2012
www.thersa.org
 
Time or a Plan C?
11
Time or a Plan C?
In October 2010 the Chancellor, George Osborne, presented what wemight want to think o as ‘Plan A’; the government’s Spending Review,which xed budgets or each government department up to 2014/15.
1
The review announced an £81 billion cut in public spending in the re-maining years o this parliament, with average departmental cuts o 19%.Since the start o the spending review period there have been numer-ous calls or a ‘Plan B’. This included a letter published in October 2011and signed by 100 economists, which argued:
“It is now clear that plan A isn’t working… We urge the governmentto adopt emergency and commonsense measures or a Plan B that canquickly save jobs and create new ones. A recovery plan could includereversing cuts to protect jobs in the public sector, directing quantitativeeasing to a green new deal to create thousands o new jobs, increasingbenets to put money into the pockets o those on lower and middleincomes and thus increase aggregate demand.”
2
Since then in its annual green budget, the IFS Green Budget warned thathowever painul cuts had been to date, they amount to less than a tentho what is planned by the 2016/17 scal year and that 88% o the cuts tobenets and 94% o the cuts to current public spending are still to come.
3
Most recently data rom the Oce or National Statistics (ONS)showed the economy shrank by 0.2% in the rst quarter o 2012 puttingthe UK into recession.With increasing commodity prices, an ageing population, and anon-going crisis across the Eurozone aecting exports many now believethe UK should not expect to return to an economy growing consistentlyat aster than 2% a year or the oreseeable uture.The Plan C challenge is or policy makers, opinions ormers andordinary citizens to examine how we would cope, and even thrive, withlong term slow growth. How can we adapt to a period o low growth verydierent rom the era o high growth that we have recently experienced?Is there any way in which we can plug this gap? What can we do dier-ently and are there are new things we should be doing?
Time or a Plan C?
It is not dicult to list the problems arising rom slow growth rangingrom high unemployment to alling living standards and decliningpublic service entitlements. Slow growth will mean more hard choicesabout public service and welare entitlements. Faced with urther re-trenchment, will it be possible through public service reorm to protectthe most vulnerable and universal service standards and i so how?
 
Time or a Plan C?
2
Does slow growth require a more proound shit in policy, expectationsand culture?Might it even be possible or some things about our economy, societyand culture to improve despite (or even because o) slow growth? Thispaper orms part o the RSA collection – Time or Plan C? – which willexplore the implications o, and responses to, slow growth rom theperspective o a highly respected and infuential set o thinkers.
 
Paul Johnson
, Director o the Institute or Fiscal Studies onwhat will slow growth mean or scal policy.
 
Gavin Kelly
, Director o the Resolution Foundation on the impli-cations o slow growth or living standards.
 
Journalist
Deborah Orr
on the values that will get us through asustained period o low growth.
 
Economist
Vicky Pryce
on the implications o slow growthor the overall shape o the economy and particularly regionaleconomies.
 
Nick Seddon
, Deputy Director o Reorm on the implication o slow growth or public service reorm.
 
Julian Thompson
, Director o Enterprise at the RSA on how weneed to change the way we see the relationship between humancapital and economic recovery.

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