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THINK-TANK WARNS ON SPENDING

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Further tight control of public spending raises real concerns about harming front-line services, according to indep...
Further tight control of public spending raises real concerns about harming front-line services, according to independent think-tank the Institute for Fiscal Studies.

'In the next year, the government should be able to maintain tight control over public spending, not least because of the extremely rapid growth in spending in the early 1990s.

'But in the longer term there are real concerns that to maintain such tight control, much tighter than on average over the last 17 years, front-line services will suffer,' it says in a statement accompanying its Green Budget, the institute's analysis of the options facing chancellor of the Exchequer Kenneth Clarke.

It notes that health, education and social security now account for 60% of government spending, up from just under 50% in 1978-79.

Social security spending has been limited by the partial privatisation of pensions. 'If spending is to be held as planned, similar choices will need to be faced in health and education,' the institute says. 'The fundamental issue is how the objective of a declining share of public spending in GDP, or even a stable one, can be squared with maintaining the provision of these front-line services at a level and standard which the public expects or needs.

'These are choices which no political party has really faced up to.'

-- Options for 1997: the Green Budget is published by the Institute for Fiscal Studies, 7 Ridgmount Street, London WC1E 7AE, price £20.

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