ICAEW chart of the week – deficit reduction

Ross Campbell, Director for the Public Sector for the ICAEW, writes:

“After a pause last week while I was behind the Great (fire)wall of China, the ICAEW chart of the week resumes with a look at how the Government has got on with tackling the UK’s current expenditure deficit.

Steady progress was made between 2009-10 and 2016-17 with the numbers mostly going in the right direction and the deficit falling from £152bn to £45bn.  While this is progress it is however still important to remember that we are still spending more than we earn as a nation – a situation that is not sustainable in the long run.

The impact of the chancellor’s decision to ease up on public consolidation in the March 2017 budget is also striking – with the deficit increasing again to £58bn in 2017-18 it has turned dealing with the deficit into a 15 year (or three parliament) problem. Continuing to run a deficit means borrowing money every year to pay the running costs.  With the National Debt at an all time high for peacetime and UK facing a worsening macro-economic position, the cost of that borrowing is only going to put further pressure on public expenditure.

It is time to deal with the deficit once and for all.”

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