The Make the Difference campaign will highlight the need for investment in education and health and for improving standards in local services.
The Liberal Democrats will be sending a clear message to the government that it now has to choose between either sticking to Conservative departmental spending limits or improving our key public services.
Mr Ashdown said:
responsible about the public finances. Yet continuing the
under-investment in our schools and hospitals while promising to make
them better is evading hard choices, not facing up to them. If the
government sticks to the Tory departmental spending limits in health and education the sick and infirm will have to wait for their treatment and our children will not get the education they deserve. Either it sticks to Tory spending limits, or makes good its promises to improve these services.
'I am delighted that in this parliament Liberal Democrat pressure has
already helped force the government to change course and put some extra money into services such as the NHS. But I fear this winter we will still see hospitals close, waiting lists rise and school standards fall.
'Despite extra cash and some savings, higher inflation means that real NHS spending is still going to be£160m lower this year than planned last year,while across all departments, a total of more than£5bn has been sliced off next year's budgets.
Announcing the Liberal Democrats' new public services campaign, campaigns and communications head Nick Harvey said:
'Today our campaign begins. Over the six months between now and the expected Budget in the spring, our MPs will be travelling the length and breadth of Britain to expose the consequences of the government's adherence to departmental spending limits even the Tories never believed in - higher hospital waiting lists, bigger secondary school class sizes, fewer bobbies on the beat.
'We will pile the pressure onto this government, and onto the chancellor in particular, to face reality in the spring Budget.
'In particular, we are pressing for the following three changes:
1. An injection of£250m for the NHS (in addition to the recent
£300 million) to prevent waiting lists rising this winter,followed by a Budget investment of at least£550m annually to keep pace with
NHS inflation. This should be used to recruit more front line staff,
with the aim of ensuring that within three years nobody need wait more
than six months between consultant and surgery, and to restore free eye and dental checks. This should be paid for by putting an extra 5p on a packet of cigarettes and by closing the loophole which allows employers to avoid the payment of certain National Insurance contributions.
2.An additional£2bn for education each year to reduce class sizes,
provide more books and equipment and to expand early years and
further/higher education. If necessary, this should be funded in the
March Budget by increasing the basic rate of income tax by 1p.
3.An extra£60m for the police to get 3,000 more bobbies on the
beat. This will be paid for from specific spending cuts in government
running costs as outlined in our alternative budget.
'Together, these measures would constitute a substantial part of the
long-term investment strategy which the country needs and for which
the Liberal Democrats have consistently called. Practical, responsible, far sighted policies which would make a real and sustainable difference to people's lives in a way that half measures applied at the eleventh-hour never will.'
-- The Government's problem with Public Services began before the General Election, when Gordon Brown decided to sign up to the Conservatives' public spending plans for 2 years - 1997/98 and 1998/99.
-- These public spending plans also made no allowance for some potentially huge unbudgeted claims on the public purse - for example, solving the Millennium computer compliance problem in the public sector has been estimated to cost some£7 billion, almost none of which has yet been spent.
-- The July 1997 Budget made the situation for public services worse, not better. As the Liberal Democrats were first to discover, the higher inflation forecast in the Budget had the effect of cutting some£5.3bn off the real value of public spending next year, and some£3.0bn off this year in real terms. These cuts were not announced in the Budget yet they will have a severe effect on all Government departments, and wipe out the majority of the extra moneys allocated to hospitals and schools from the Contingency Reserve.
Among the effects which we anticipate for Public Services are :
-- Higher hospital waiting lists
-- Rising secondary school class sizes, and a cash squeeze in
-- Up to 6,000 fewer police officers on the beat
-- Cuts in local services such as fire and social services
The National Health Service.
-- The Government claims to have tackled the funding problems in the NHS by allocating an extra one-off£270 million for 1997/98, and an extra£1.2 billion for 1998/99.
-- However, higher inflation slices some£430 million off the NHS Budget in 1997/98, and some£790 million off in 1998/99. Consequently, in real terms after the extra cash injections, the NHS is now some£160m worse off than under Ken Clarke's plans this year, and only some£410m better off next year (1998/99). So over the 2 years, 1997/98 and 1998/99, the NHS will receive only some£250m more than under Ken Clarke's plans, versus some£1.1bn proposed in this year's Liberal Democrat Alternative Budget.
-- The NHS also faces unbudgeted pressures from the urgent need to resolve its computer millennium compliance problem. Unless this is sorted out, the NHS could be thrown into chaos by the year 2000 date change. The cost of resolving this problem has been put at between£250m and£1,000m. This work will clearly need to be completed over the next 2 years. It has been confirmed that the money will have to be found from existing Budgets. This will put further severe pressure on the NHS.
-- Even with the new moneys for the health service, NHS real funding is
set to grow at only around 1.4% this year and around 1.7% next year, well below the average real growth rate of 3.1% under the Tories. Models of NHS funding show that waiting lists tend to rise when the growth rate of funding falls significantly below 3.0%.
-- Despite the welcome extra winter cash, we therefore expect NHS waiting lists to go on rising, breaking the spirit of Labour's election promises to 'save the NHS' and 'cut waiting lists'.
-- There should be an immediate extra injection of£250m of cash this
winter for the NHS to stop waiting lists rising. The next Budget should also include a better long term funding plan for the NHS to improve the service.
-- The cash squeeze will hit Education, too.
-- Higher Education received no extra budget funding, and is instead hit by the higher than expected inflation. Under Gordon Brown's plans, real spending on higher education will fall by£633m between 1995/96 and 1999/2000 (12.7% in real terms). This is even after the extra money from tuition fees, on present Government plans.
-- Liberal Democrats are opposed to tuition fees, but if the Government
does take this course then it should at least change its accounting for tuition fees and loans to distinguish between Government lending and Government spending, and so free up money for immediate investment in higher education.
-- In our schools there is a cash crisis, too. Higher inflation will
offset the extra Budget cash for schools. So, this year Local Authorities will lose some£670 million net, and next year some£80 million net. This is on top of a planned 1% real cut in planned Local Authority budgets between 1997/98 and 1998/99. So schools will only get ANY extra cash if it comes from other local services.
-- In reality, with 55,000 more pupils next year, class sizes in secondary schools are likely to rise further and more finance-driven teacher redundancies are likely.
-- Liberal Democrats propose that if necessary, the basic rate of income tax should be raised by 1p in the March Budget to pay for an annual investment of£2 billion in education - cutting class sizes, boosting books and equipment, extending pre-school education to all 3 and 4 year olds whose parents want it, and improving further and higher education.
-- Local Services face very severe cuts, with budgets already due to
decline by 1% in real terms now hit further by higher inflation.
-- If moneys are switched into schools, then other local services will be even harder hit.
-- Fire services, social services, local roads repair, police and public
libraries all face cuts.
-- The 1998/99 cost to Local Authorities for higher inflation is some
£1.3bn - or more than the entire cost of running the English fire service.
-- Local Authorities face further costs of up to£300 million from the
Government's budget change to dividend tax relief, which will force
higher contributions to Local Authority Pension Funds.
-- The Police Budget will be hit by over£80m by higher inflation in
1997/98, and by some£145m in 1998/99. This is the equivalent of cutting
some 6,000 police officers, threatening Labour's Manifesto pledge to
'...get more officers back on the beat'. (Labour Manifesto, 1997).
-- Liberal Democrats believe that local people should be given more say
over financing local services, with a fair system of local as well as national voting.