Posted this elsewhere yesterday. Shows the scale of the challenge.
We are, as a country, determined to spend beyond our means. We spend north of £700Bn a year of which £460Bn (that's 66%) is split across three departments (Health, Education, Social Security - inc pensions) where there will in general be ever increasing demand, partly because we have an increasing population (both from immigration and an ageing population) and partly because the scope of those services will always tend to increase as well (treatment because we can, lifestyle issues, education scope etc etc). Two of those budgets are ringfenced and the other contains a component (pensions) that will only continue to increase whatever you do to other parts of it. This means that the burden of "trying to live within our means" falls disproportionately on other departments. Just so that's clear, the £84Bn to balance the budget would need to be found from around £270Bn of spending, across departments where the biggest of those remaining is (you've guessed it) the MoD at £38Bn. We going to get much of the £84Bn out of that? Or the Home office at £32bn? Or the next biggest, which is the support to home carers at £31Bn?
Delivery of services in the big three departments is predominantly (but not exclusively) via the public sector and any attempt to improve efficiency in a meaningful way (as opposed to mandating "efficiency savings", which end up being cuts) are resisted tooth and nail, some with good reason, others far less so.
We cannot drastically increase the tax take, because if we're honest, the big areas for tax take are mobile and can and will move out of our jurisdiction, with knock-on effects on employment and other taxation. As an illustration, there remains a significant body of people within this country that believe "I've paid me stamp, I'm entitled" - National Insurance collects £110Bn pa or put another way, less than 25% of what is required to support the three departments that form the cornerstone of the welfare state. The money fairy does not exist, so either we find more money from somewhere, or we stop spending as much (and no the DFID budget doesn't even scratch the surface). See graphic from the fount of all wisdom - the Grauniad.
http://www.theguardian.com/news/dat....zoomed-picture
In short, we need to stop and think what we're doing, because demand is always likely to exceed supply. A spending competition is why Ed Balls and Wallace are not to be trusted with anything more complicated than a crayon, let alone a bacon sandwich.