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Does funding take into account inflation and changing needs?


It is important to consider whether government data on spending has been adjusted for rising prices. If the same amount of money is allocated but the prices that the public service has to pay for inputs have gone up, then in real terms there has been a cut.

For example, in England, spending on schools was maintained in real terms 2010/11 to 2014/15; but from 2015/16 spending was frozen in cash terms, although prices for things schools need are rising, so that in real terms there will be a cut of around 6.5 % in the period 2015/16 to 2019/20.

Population growth and changing needs

Another consideration is whether the population to be covered by the service has risen. If the same amount of money is provided but the number of people to be covered has risen, then in per capita terms there has been a cut.

For example, when cuts were made to other public services, the UK government claimed that spending on health services would be protected. In England, spending on health services did grow on average 1.3% a year in real terms between 2009/10 and 2015/16, but this was significantly lower than the increase in demand for health services, from a growing and an ageing population. Even though the government plans to spend more money on health services in the period up to 2019/20, real per capita spending, adjusted for the expanding needs of an ageing population, will have fallen by 1.3% between 2009/10 and 2019/20.