There was a cynical chuckle in the Commons during the pre-Budget Report when Alistair Darling told MPs “we take these decisions from a position of strength”. What decisions? Why, cuts in the public spending deficit, of course.
Actually, the chancellor had a point of sorts. Public services are in much better shape than they were in 1997, better equipped, better housed and much better staffed. It should be relatively easy to squeeze a few billion - and much efficiency - out of the system, ministers have breezily assured me since the pre-Budget report.
The health secretary is less of a headbutter than Balls
That said, the prospects for 2010 are as grim as we have long feared. Darling had a respectable reason for postponing the tax and spending squeeze until 2011, namely that the UK economy is not yet officially out of recession: don’t stifle recovery.
Less respectable is postponing bad medicine with one eye on the election. It prompted weekend speculation about a 25 March poll, though I remain a 6 May man.
The financial markets got jittery about funding all that government borrowing. Might Britain become the next Dubai, at risk of defaulting on its debts? Might lenders demand higher interest rates that eat into spending budgets?
This column tries to be a panic free zone, but also a prudent one. In a weekend Financial Times interview NHS chief executive David Nicholson insisted the service can save the £15bn-£20bn needed in 2011-14 without cutting frontline services - the chancellor’s emphasis - and possibly improving quality.
His optimism rests on familiar themes: even tighter pay restraint (1 per cent on pay equals 10,000 jobs); less care in hospitals; adaptable staff. I realise hospital staff at every level will squeal - top managers facing higher taxes and national insurance, fewer pension perks, public justification for those £150k salaries - but the private sector is hurting.
One reason why unemployment is lower than feared is that many employees are accepting pay cuts and no overtime. None of us can ignore that. In 2010 it may all get worse. My hunch is that unions like Unison will be realistic, despite rhetoric to the contrary: flexibility in return for job security, as Andy Burnham seeks.
Darling’s strategy for recovery rests heavily on getting economic growth again; all those new “green” boilers he wants, all that biotech research. That is correct, sensible experts agree. You can manage mountains of debt if you have growth. We finally paid off World War II in 2002.
That still leaves the NHS facing Nicholson’s daunting challenges, whoever wins the election. I think we can assume it is true that Number 10 wanted Darling to sound more optimistic than the Treasury wanted and to keep cuts talk vaguer. That is the Brown style, the style that helped create the huge budget hole the bankers have been enlarging.
Burnham has been identified with the Brown-Balls tendency which wants to accentuate those “dividing lines” with the Tories. Children secretary Ed Balls even boasts his last minute haggling with Treasury officials for extra education money will help that.
I am sceptical. The health secretary is less of a headbutter than Balls. But he told colleagues he had won “a bloody good deal in the circumstances”. That translates as inflation proofing for the 95 per cent of NHS spending that goes to patient care (2011-13), offset by those £10bn a year worth of people-centred, integrated efficiency savings; plus the £500m haircut for the IT budget, an easy target for populist MPs in all parties.
All just talk, I know, and horrible jargon too. Burnham’s new five year-plan, “… from good to great” locks 10 per cent of trust budgets into patient satisfaction too. Did I say five years? Heaven knows where we will all be in 2014. Good luck.