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Old 22nd Jul 2015, 22:30
  #60 (permalink)  
Frostchamber
 
Join Date: Nov 2007
Location: UK
Posts: 327
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If the economy grows as predicted, HMG will probably need some creative accounting in addition to the .5% real terms increase if it's to keep to the 2% commitment. I realise that hard bitten cynicism is the only safe line on here (and it's generally justified in the light of experience) but in this case I think it's probably true to say that the defence budget is largely protected, even if some of the "increase" needed to achieve 2% over the next 5 years comes from smoke and mirrors. If that makes sense.

But expect also to see a push for efficiencies despite the resource commitment. In the public sector you don't get commercial pressures driving efficiency, it has to be driven out to some degree, otherwise a proportion of any resource increase gets mopped up by efficiency losses.

Oh, and don't forget that even before any extra resources flow through from the recent commitments, there's still an £8bn unallocated pot waiting to be spent. Enough to cover the up front cost of a slack handful of P8s and more besides.

It's always possible that the govt will go overboard on the creative accounting but even so I think there's some justification for just a glimmer of cautious optimism, even on here - and certainly by comparison with what we expected before the budget.
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