Changes to public services

The next general election looks set to be dominated by one issue: public spending cuts. Record national debt means that any future government will have to cut costs - either through spending cuts, tax increases, benefit cuts or a combination of all three.

Ministers are generally unable or unwilling to put their cards on the table this far out from a general election. Gordon Brown may have uttered the "c" word - cuts - for the first time in his speech to the TUC this week after months of insisting spending would continue to rise, but he did not go into specifics.

Vince Cable, for the Liberal Democrats, has outlined nine areas where public spending must be cut. This will be voted on by the Liberal Democrat Party Conference in Bournemouth this week. David Cameron has said he will set out detailed proposals before the next election, which must happed by June. Labour are expected to give more details on where the axe might fall in the pre-Budget report in November. All parties say they want to protect "front-line" public services, and they are all keen to stress that health and education are priorities.

The Tories have announced plans to scrap quangos such as the regional development agencies, ID cards and some IT projects, but they admit that this will barely make a dent in the £804bn national debt. Lib Dem Vince Cable has detailed £14bn in cuts, including plans to means-test child benefits and freeze public sector pay, but he may face opposition to his plans from his party. Lid Dem leader Nick Clegg has said £2bn could be cut through measures such as reductions in government departments, quangos and spin doctors.

Sector income from statutory sources totals £12bn.  And although this only accounts for 2% of the UK government’s expenditure on public services; the fear is that the sector could be seen as a soft target for cuts.