Philip Hammond has to find an additional £ 5 billion in Whitehall's spending review this year to cancel the planned cuts and meet his demand to end the austerity, revealed a leading think tank.
The Institute for Fiscal Studies has informed the Chancellor that the funds announced in last year's budget to increase spending on NHS, defense and international aid have failed to preserve local councils and some government departments hardest hit.
The think tank said that a minimum of £ 2.2 billion would be needed to freeze all budgets and protect them from inflation, but that ministers should find an extra £ 5 billion to allow departments to maintain services adapted to the growing population of the United Kingdom.
Hammond claimed that "austerity was coming to an end" in last year's autumn budget after better-than-expected tax revenues and a relaxation of its deficit rules allowed him to promise an increase in public spending of £ 30 billion by 2024.
The IFS figures showing that to keep his promise, Mr. Hammond needed to find more funds will come to bear a heavy blow to the Treasury as he prepares the Chancellor's spring declaration that was to take place on March 13th.
A sharp slowdown in economic growth in recent months should force the independent Treasury forecaster, the Bureau of Fiscal Responsibility, to downgrade the government's tax revenues and increase spending over the next five years.
The uncertainty surrounding Brexit in the coming weeks is likely to worsen the situation, as the population continues to grow, to about 1 million people every four years, further encouraging Hammond to find additional funds to keep his promise of end the program a decade ago.
Ben Zaranko, an economist at IFS, said the interim plans presented in the autumn 2018 budget revealed a reduction in daily expenses in public services other than health, defense and security. overseas assistance of about 0.4% per annum in real terms and 0.9%. % per inhabitant.
Budget cuts will add to cuts of up to 40% in the Department of Justice, the Ministry of the Environment, Food and Rural Affairs and Local Government since 2010. .
Zaranko said the next round of cuts would be much slower than the one observed over the last decade "but would not represent an" end to austerity ".
Richard Watts, Islington Board Leader and Chairman of the Local Government Association's Resource Council, said, "If the government does not adequately fund the local government during the review of expenditure, the financial viability of certain services and advice is seriously threatened. .
"The advice was at the beginning of the queue when austerity started, so local services should be ahead of the queue if it ends."
John McDonnell, the Chancellor of the Shadow, said the government claimed that austerity was over.
"It is becoming increasingly clear that despite Theresa May's speeches, austerity is not over. Unless Philip Hammond, at the very least, finds an additional £ 5 billion in the spring release, the departments are planning further cuts next year.
"Nine years of brutal austerity by the Conservatives have hurt our public services and the entire country that depends on them. The Chancellor has promised a "Brexit bonus" and any breach of the spring declaration will be further proof of the Tories' failure in negotiating a Brexit deal that benefits the job. and the economy. "