Child benefit should be means-tested, doctors and NHS managers’ pay cut by 10 per cent and winter fuel payments for pensioners should be scrapped as the first steps in cutting public spending, Reform, the think-tank, says on Monday.
Reform makes proposals for nearly £30bn ($44bn) of spending cuts in an effort to tackle the government’s fiscal deficit.
Defence projects that “do not contribute to modern defence requirements” should also be scrapped – including aircraft carriers, fighters and transport aircraft – to gain a saving of £2.7bn. So should free TV licences for the over-75s.
Graduates should pay a market rate for student loans, rather than having them linked only to inflation, saving £1.2bn.
Some £11bn could be taken out of the £160bn benefits bill by measures that include abolishing child benefit as a universal entitlement and removing £3bn-worth of “pension add-ons” such as the winter fuel allowance, even after allowing for some higher spending to compensate poorer pensioners.
More than £5bn could be saved on the £100bn NHS budget by introducing charges for visiting GPs, reducing the pay of doctors and senior managers by 10 per cent, cutting the capital programme and abolishing strategic health authorities, the think-tank said.
A similar sum could be saved in the £90bn spent on education by ending the government’s schools building programme, and scrapping various agencies and programmes from Skills for Life to Train to Gain.
Reform’s call comes as the government has already outlined the need to cut almost £40bn from public spending over the three years after 2011. Given the deterioration in the public finances since the pre-Budget report, that figure is expected to rise when Alistair Darling, chancellor, presents the Budget on Wednesday.
George Osborne, the shadow chancellor, has already called for bigger cuts, arguing that Labour’s current plans are unsustainable – although he says he does not intend to spell out during the election campaign precisely what the Conservatives would axe.
Given the problems facing the public finances, Reform’s pamphlet is likely to be the first of a string of publications from think-tanks on how public spending might be cut. Andrew Haldenby, its director, denied the organisation had taken a blunderbuss approach.
Specific cuts needed to be identified, he said, rather than politicians pretending the spending gap could be closed just by cutting waste and quangos.
“We’ve focused on the big spending areas, and these are the sorts of things that the Treasury should be presenting to the next government on its first day in office.”
Get alerts on UK politics & policy when a new story is published