17 years ago, I came of age and could vote for the first time.
Back then getting a doctors appointment was relatively easy, NHS dentist was just a standard part of life for everyone, bins were collected weekly, NHS wait times were much better than they were, an ambulance would show up relatively quickly, trains were rarely late/cancelled/on strike, and in general everything just seemed to function a fair bit better.
https://www.statista.com/statistics/284298/total-united-kingdom-hmrc-tax-receipts/
Tax income back then was about £456 billion.
Tax income is now £786 billion. Had it just increased with inflation, we’d be at £708bn.
So we got a cool £80bn more coming into the government coffers, but every public service imaginable is *at least* half as good as it used to be.
More money, less services..
Bins are now once every 2 weeks (and stinking piles of rubbish piling up the norm for my block of flats), my friend waited 4 hours for an ambulance recently, NHS dentists are rarer than unicorn shit and many go private now, you gotta call up between 8am and 8:01am for a doctors appointment, I can’t remember the last time I successfully used a train (rare train user, but seriously every time I’ve tried to use one in the past year has been a disaster of delays and cancellations)..
I don’t understand how we’re paying so much more, for so much less.
Almost 10% more funding for government, sub 50% service levels for most public services compared to 2008.
What gives?
Easy answer is ‘The Tories!’ and sure, but HOW. Where is the money going, exactly.
I don’t want to hear their pockets, because theyre obviously not embezelling £300bn odd a year are they?
The answer is clearly more complicated than that. What exactly is it they’ve done, to fuck things so completely?
by SoumVevitWonktor
32 comments
While tax revenue has gone up so has the cost of providing those services due to the same inflation.
The rest is just miss management.
The idea that we have politicians who are only looking after keeping their party in power and thier seat and making themselves more money/famous making crucial decisions over academics who know their onions still baffles me.
Inflation is an aggregate measure which may not accurately represent the changes in costs of items like schooling, councils, health, etc.
Simply. Cost of providing civil services have increased. While wages and therefore the tax take has barely increased. Thus leaving a deficit.
Relatedly consumers have less to spend. Less money in the economy. Further less tax take. Etc. And round and round it goes.
We either have to tax more to meet the rising costs. Or. Become richer. Neither of which are simple problems.
The money is worth less
UK M2 (money supply) has pretty much doubled since 2006 (17years ago as you say).
https://tradingeconomics.com/united-kingdom/money-supply-m2
UK politics is full of people that only want personal power and money, if they have to pretend they want the best for the country at the same time, that is a price they have to pay. So much money gets “mismanaged” or blatently skimmed off the top it is unreal.
One reason is that since 2010 the amount of government debt has risen and the credit rating of the country has steadily fallen from AAA status to around about AA status.
The downgrade means that the British goverment pays more interest on its borrowing, which detracts on what the government can spend money on.
Penny wise, pound foolish.
In 2008 there was a global financial crisis. Governments around the world responded to this, in part, by reducing interest rates to encourage investment and borrowing to promote growth and recovery. This gave us the past decade of historically low interest rates.
Instead of borrowing to invest and grow the economy through the public sector, something the Tories are ideologically opposed to, the Tories focused much more on what they called ‘finding efficiency savings’, referred to by the likes of Osborne as ‘fixing the roof while the sun is shining’.
In reality these ‘efficiency savings’ were just budget cuts to public local and centralised authorities and organisations.
Often made while simultaneously demanding they take on more responsibilities and work.
Not forgetting of course, also continuing with their love of selling ‘the family silver’ with the Royal Mail privatisation which saw it sold far below market value and making a fortune for a select few.
But the biggest problem was that there was no overarching plan or vision. The cuts were just cuts, with ever moving targets and no long term goal beyond the ever nebulous mantra of ‘reducing the national debt’.
Which speaking of, Osborne missed every target he ever set himself regarding the national debt with barely a whisper from the electorate or media.
So cut to the present. The support systems which helped people through the last crisis are no longer there because they were cut for ‘efficiency’ or in the case of regulators, they’ve been defunded to the point where they’re completely ineffective when it comes to dealing with current issues caused by the privatisation of services.
Council’s have had to resort to utterly irresponsible schemes to keep up with their legally mandated responsibilities due to funding cuts. We’ve seen some of the more irresponsible ones go bust in recent years. But over half of them are reporting they may collapse in the next year.
And because the Government wanted to downsize departments for efficiency, they laid a bunch of people off.
Anybody that’s ever been through a redundancy process will know that the most talented people will leave the second they get the pay out offer and probably be in a new job that time next week. So the civil service and local government’s lost a huge amount of institutional knowledge and expertise that they now have to pay for from the consultancy sector.
But not only that, preventative programmes and maintenance were seen as inefficient so they went too. Leading to things like the current RAAC buildings issues which should have been addressed a decade ago (when money was cheap, and the issues easier to address) but put on the back burner to reduce a figure on a spreadsheet.
So we have less support systems.
Less stability in terms of supply chains (thank Brexit for that one).
More infrastructure work needed than ever, much of it absolutely critical.
Less institutional knowledge throughout government, leading to reliance on consultants (which cost far more than direct employees).
And all of this while the cost of money is increasing again.
In effect, the Tories saw the sun was shining and decided to make the roof holes even bigger so they could get themselves their ‘time in the sun’ with no regard for what would happen once it started to rain again, and now we’re all paying the price.
Literally.
Government is also greedier because they answer to nobody.
Wasn’t there a company that said they’d provide ferries when we left the EU, which then fell flat but the company demanded the millions from the government for the contract? And wasn’t it a government minister or their family that owned that company? And that company didn’t actually own any ferries? Maybe I got this wrong.
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But also, companies are a bit more rubbish these days.
Nobody seems to be striving for the “highest customer service” any more because people will continue to use their services anyway. The drive to receive the service being given is more important than the quality of it – people don’t want to miss out, even if it’s rubbish. Whether it’s public transport, leisure resorts or the local council, nobody seems to truly care as much since covid.
One factor is not just debt but the way it’s structured. The UK has unique amounts of interest rate linked debt for various reasons that boil down to “it seemed like a good idea at the time”.
As a result 11% of the tax take goes on just servicing debt and we have the highest repayment rates of any major economy.
We have an aging population; there are more retired people now than ever before, both as a number and as a proportion of the population. Older people receive a pension (which is a huge chunk of the state budget), and have higher healthcare requirements.
And as a knock-on effect, because the proportion of pensioners is increasing, the proportion of working-age people is decreasing. So a larger cost burden is falling on fewer tax-payers, so they each pay more.
The Tories have been hoovering public money for 13 years. No investment in public services whatsoever. Brexit, the pandemic, and the war in Ukraine have devalued the pound.
In fairness to incompetent politicians of all hues there are some challenges, one of the main ones being that there are proportionately more older people (for example the UK has approximately 1.5 million more over 65s in the last decade) and older people consume more public funding & funded services from state pensions, to healthcare to social care.
As healthcare technology enables us to become ever better at extending the non-productive period of a populations’ lifespan we should expect this to get worse until other technologies enable productivity from the working population (or automated replacement of the working population) to balance the effect out. Hopefully.
The economy changed.
The 80/90s were massive growth years post 70s recession. Globalisation and the opening of global trade. Helped by the selling off of a lot of what the state owned to invest in the country. The UK service economy was the in thing globally and growth shot upp
The 00s it started changing to a tech economy being the in thing. The UK didn’t change. The service economy kept things proper up but that was it. Growth stagnated.
Then 07-08 recession we started selling the last of what we had to prop the economy up whilst following the global trend for QE to stop a 1920s depression. (Arguably the wrong thing to do you need to clear the chaff to relight the phoenix).
You then had Brexit, that’s another spanner followed by the pandemic where the world went crazy and started more QE in massive fashion without considering the consequences (again to avert recessions that are needed).
Now we’re seeing the restricting of global supply chains via wars and self interested politics and large countries that can support themselves prospering more with protectionism.
Throw in an ageing population, wars and generic politics where both sides are interested in short termism and not addressing the reality and we have an economy that’s just holding its head above water but kicking a debt can down the road further.
Many especially on here will try to blame the Conservatives. But the global narrative suggests whoever was in power would struggle to keep the Uk prosperous. And arguably decisions made by labour in the late 90s alphabet helped the situation. The reality is it doesn’t matter who’s in power were a minow in a global world with few natural resources, aging populace and not a very diverse economy.
Well, we just borrowed around £400 billion for covid while at the same time practically shutting down the entire economy.
Our trading partners did the same.
Everybody was complicit in that happening, so rarely will people even acknowledge that it has been a major contributing factor to the economic situation we are in today.
We were warned that it would hit the economy, especially the least well-off, hard for years after covid.
and, of course, all the other dumb stuff the government wastes money on contributes.
But I would say the £400 billion in borrowing and shutting down the economy is the major blow that’s making all the difference, even middle class folk are hurting.
My take: A combination of inefficiencies from private firms in how they run public services, the decline of the ‘welfare state’, and the UK’s economy has always been garbage built as it is on speculation rather than innovation/industry.
Ironically the garbage economy was always masked due to the existance of the welfare state/public services. The middle-classes could not maintain a decent quality of life without them, something they clearly didn’t understand and perhaps still don’t.
Welcome to Tory World….where everyone but the richest get f**ked over by the richest.
And the masses that vote for it!
Way more old people requiring gold plated state pensions, less people in work than ever to pay for those pensions.
One thing to consider is the exchange rate which has fallen from 1.6ish USD in 2010 to 1.3ish now. In a globalised world a lot of things just cost the same worldwide in dollar terms but our GDP and tax receipts and everything else are worth a lot fewer dollars now.
We have aging demographics skewed towards the retired, We have a population crippled by the housing crisis ravaging social security budgets, We’ve failed to invest in our infrastructure for a very, very long time (And like at home, the only thing more expensive than replacing rot is *not* replacing it),
We have a government culture of giving contracts to mates in exchange for kickbacks – meaning everything is overbudget, late, and doesn’t work properly (Case in point I was interviewed to develop the Android client for track and trace – I told them upfront why it wouldn’t work at all (And my experience here is extensive) and cited examples, And they didn’t give a shit.
Conservatives took advantage of the population bulge (Baby boomers) and bribed them into looking the other way while investing in our youth and future went out the window (See giving money year in year out to mostly wealthy pensioners while we have hundreds of thousands of children with no fixed address, etc) – Democracy falls apart when any one segment becomes influential enough to drain another, it’s just not setup for such a population spike.
This might sound like spite towards boomers, but circumstance did the heavy lifting.
My personal feeling is that since much of our public services have been outsourced, we have now added a profit margin into what was previously delivered as a not-for-profit service. All private entities exist to make a profit by reducing costs, squeezing the quality of their service as much as possible, hopefully without their consumers noticing the reduction in quality (see: Shrinkflation).
This applies to trains, busses, dentists, GP practices, swimming pools and leisure centres etc. If that particular service happens to be a monopoly and / or not directly visible to public scrutiny then the situation will be worse – the profit margin will be wider and the reduction in quality will be more extreme (see: PPE scandal).
Hence, we all pay more and get less, while anyone with an ownership or stake in the firms providing these services becomes ever more wealthy.
In extreme cases a service stops being provided altogether because it is no longer profitable, and that profiitability is the only factor deemed important in this world (see: Mental Healthcare or Rural Bus Routes).
It’s bigger than the UK, living standards across the Western world are declining. Why this is happening is multi-faceted and will probably only fully understood centuries from now. I suspect more than some of it is fuelled by what will later be identified to be the bourgeoning effects of climate change, exponential global population growth and a global class war made possible by globalisation of commerce.
On that third point, it helps to imagine the world as a single country. In the “good old days”, thanks to Western colonialism, the truly poor participants in our economy were “over there” somewhere out of sight and mind in Bangladesh or wherever – every UK citizen was generally protected from that level of poverty and lived comfortably as part of the global “upper class”. With increased globalisation, we have also increased social mobility and opportunity for those we previously disenfranchised or simply didn’t do business with. So now, you, UK citizen, are increasingly competing against the rest of the world for labour, housing etc. What this means is that on a global level poverty is reducing, but at a local UK level, poverty is increasing as wealth is redistributed. The class war is the very richest in our society moving from “UK rich” to “World rich” and the rest of us moving from “UK poor / middle class” to “World middle class / poor”. This is why we are seeing the wealth gap increase, and a big part why services are declining. The World rich don’t care about the UK – they just go where things are best.
Welcome to r/latestagecapitalism
40 years of neoliberalism will do this to a country.
Tories.
Honestly it is that simple. This is the party of ‘self self self’, and whenever they hold power they loot the country, pocket the money and are eventually kicked out leaving an enormous mess to fix. They did it last time they were in and they’re going out on the same.
And yes – the money goes on tax breaks, grants etc for people who donate directly or indirectly to the Tory party.
The recent PPE debacle, for which Barnoess Mone is the poster figure, was over 1 billion of undelivered contracts most of which were for companies set up purely for those purposes and with close tory ties. No effort at all to reclaim this money.
With austerity and brexit and everything else, we’ve lost growth in our economy ( I blame the tories love of trickle down nonsense). Without extra revenue from growth, the money gets absorbed quickly by inflation, wage increases, inefficiency, etc.
we need stability and business friendly policies
The easy answer is the Tories, and sadly that is the answer. An awful lot of public money ends up in them and their friends/donors pockets.
There are some mitigating circumstances though, COVID, Brexit and a growing population. But this government has wasted an awful lot of our money and improved on nothing. I think the only thing they’ve managed to be successful with is widening the gap between rich and poor.
There’s a lot of people extracting money from the public purse through various means. Corruption, made up jobs, privatization, contracts for pals, bad procurement practices, etc Basically bad management. It’s very difficult to get rid of bad management. Most government departments, both local and central dont really care about the money they spend because they can always ask for more.
Because larger amounts of that money are going into shareholders pockets instead of being used to actually provide a service.
Privatised water being just the most obvious example.
I found my old council tax bill from 2013 when I paid £1100. In ten years my council tax has jumped to £1700 a year. And the services it provides have declined so much, they’re unusable.
We are paying more interest now on national debt (which is huge). Thank Liz Truss especially for this.
Let’s say there are two options for a given project…
Option A gets the job done well, costs £3b, and includes £100k profit to the contractor.
Option B gets the job done adequately, costs £2.8b, and includes £200k profit to the contractor.
Tory governments will choose B every time. This results in a slow degradation of services over time, due to the poorer standard becoming the new normal, allowing even poorer standards to be considered “adequate” as time goes by. The saved money is usually spent on lowering taxes for high-income groups and for corporations. The fact that the contracts are usually given to their mates is by design.
Repeating this every year for two decades worth of decision-making, and this is the result.
Its the unspoken issue in the UK – Our *entire* culture and normal procedure for contracting out any kind of public work to spend that collected tax money has become deeply deeply corrupt. We are paying through the nose to “lowest bidder” providers who then seem to play every game in the book to find ways to take more money while providing zero work. From my friends who were involved, HS2 was absolutely riddled with this kind of practice. Hiring in a company on the cheap, usually one that had no experience with rail infrastructure over those that had experience, because the company with experience was giving a *realistic* price for the job. Cheaper company cocks everything up, nothing is up to spec, but they’ve technically followed the letter of the contract so it all becomes a big (and expensive!) legal mess to deliver the absolute barebones of an outlined work or project.
That, applied to ***everything***, for over a decade, and this is what we get. Look at covid PPE, its exactly the same culture, but that was just a lot more visible and egregious.
As a nation we have been captured by cowboys. We’re the national equivalent of a ripped-off OAP who’s now confused why all their money has gone to fund some sloppy half-finished work and has no real place to turn for justice.
Because we have a higher population and an ageing population and medical costs are rising, the NHS takes up the biggest share of government spending
We printed +30-40% extra cash during covid.
https://www.youtube.com/watch?v=qBDJmeaa2Mg
Even the Bank of England’s longest governor knew it would create massive inflation !