KPMG criticises chancellor's short term pledges

In response to Alistair Darling’s pledge to increase spending for the “frontline NHS” for two years from 2011, KPMG public sector head Alan Downey said: “This is clearly a pre-election view of the world which will need to be revisited immediately after the election.

This is clearly a pre-election view of the world which will need to be revisited immediately after the election.

Alan Downey, KPMG

“We have been waiting for an announcement on where the axe will fall but it is clear that at this stage in the electoral cycle the chancellor’s weapon of choice is a butter knife rather than an axe.

“Those who were expecting a plan for reducing public expenditure will be disappointed.

“On the contrary, the chancellor announced a significant number of new spending commitments plus a guarantee to increase spending in real terms on health and education and to maintain spending on the police.”

Despite his pledge to increase “frontline” NHS spending, Mr Darling said elsewhere in his speech that spending growth will fall to 0.8 per cent a year between 2011-12 and 2014-15.

He warned that the slower spending growth would mean cuts to some departmental budgets and a focus of resources on priorities.