09:07 ET<\/span>
\n<\/span><\/p>\nRising inflation means cuts to public service spending are bigger in real terms than they would otherwise have been, a financial think tank says.<\/p>\n
Cuts will on average be one percentage point greater over the next four years than announced in the spending review, the Institute for Fiscal Studies says.<\/p>\n
The IFS says that means that cuts will therefore “be harder to deliver”. <\/p>\n
The planned \u00a381bn cuts could lead to the loss of 490,000 public sector jobs. UK consumer price inflation is 4.4%.<\/p>\n
‘Barely true’<\/span><\/p>\nIt also said that as far as public finances were concerned “the totality of measures announced in [Wednesday’s] Budget was a fiscal non-event”.<\/p>\n
In its Green Budget, released the day after Chancellor George Osborne revealed the UK Budget for 2011, the IFS also turned its gaze to government promises on the health service.<\/p>\n
“In terms of the government’s pledge to grow NHS spending in real terms year-on-year, this will now be only barely true between 2010-11 and 2011-12,” it said.<\/p>\n
“If 2010-11 spending had not turned out less than planned, there would have been a small real cut in 2011-12. <\/p>\n
“The government is sailing perilously close to the wind with respect to honouring this particular pledge.”<\/p>\n
‘Formidable’ cuts<\/span><\/p>\nOn Wednesday, the think tank said the government’s prediction of a return to fiscal health by 2014-15 hinged on the “unobservable” growth potential of the economy.<\/p>\n
The forecasted return to surplus in the latest budget was even more dependent on a pick-up in growth in 2013, said the IFS.<\/p>\n
It came after the Office for Budget Responsibility (OBR) cut its growth projections for the next two years.<\/p>\n
And the IFS said following the Budget that the planned cuts over the next four years remained “formidable”.<\/p>\n
Last October, it had said that poorer families with children would be the “biggest losers” in the cuts.<\/p>\n
That analysis was derided at the time by Deputy Prime Minister Nick Clegg as “complete nonsense” in a spat with the think tank.<\/p>\n<\/p><\/div>\n<\/p>\n
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