WBG warns against austerity 2.0, a triple whammy for women

Read the briefing here 

This is the fourth of a series of briefings on the gendered dimension of the cost-of-living crisis. 

The Cost Crisis: a Gendered Analysis (September 2022)

The gendered impact of the cost-of-living crisis (March 2022)

The income crisis – a gendered analysis (June 2022)

A new briefing published by the Women’s Budget Group today warns against austerity 2.0 for public services. According to the briefing: 

Public services had been weakened by 10 years of austerity going into the global pandemic of 2020

• Government spending on public services as a share of GDP decreased from 47% in 2010 to 40% in 2019.^[1]
• Central Government funding for councils in England was cut by over 49% between 2010 and 2017/18.^[2]

The pandemic made things worse, and public services have not yet recovered

• By February 2020, just before the pandemic, 4.2 million people were on the NHS waiting list. This reached 7 million people in the two and a half years to August 2022.^[3]
• At the beginning of the year, nearly 13,000 people met the criteria for leaving hospital but were not discharged because of a reduced capacity at the community level to provide care.^[4]
• The vacancy rate in the social care sector reached 10.7%, while for NHS providers it reached 9.7% in June 2022.^[5]
• On average, workers in the public sector are now paid 0.7% less than workers in the private sector.^[6]

The impact of high inflation and energy costs is leaving public services with few options

• Because of the high level of prices, a planned increase of £1.5bn in real terms for the Department of Education is now a cut of £0.6bn for the period 2022-23 to 2023-24.
• Inflation will add an estimated £1.5bn to costs for the 40 largest councils in England.^[7]
• Increases in workers’ pay without increases in departmental budgets will result in squeezes elsewhere, resulting in lower quality services.
• School leaders are considering redundancies and cuts to support for children.^[8]

 Women are more likely to work in public services, rely on public services, and become the providers of last resort when public services are withdrawn

• Nearly 80% of the employees of the NHS are women.^[9] In the adult social care sector, around 82% of workers are women.^[10] Around 76% of teachers in England are women.^[11]
• During the Covid-19 pandemic, mothers on the lowest incomes were eight times more at risk of those on the highest incomes when schools closed.^[12]
• Over 4.6 million women were estimated to have been prevented from securing a job or increasing their working hours due to unsuitable childcare options in 2021.^[13]
• Previous analysis published by WBG in partnership with the Runnymede Trust found that austerity hit particular groups of women harder, including Black and minority ethnic women, disabled women, and lone parents^[14].

Dr Mary-Ann Stephenson, WBG Director said,

“Anything other than increases for public services in line with inflation is an effective cut, which – after a decade of austerity measures – is unimaginable for the services we all rely on at some point in our lives: schools, childcare, social care, healthcare.

“These are the foundations of a healthy economy, and it is a largely female workforce who have kept them going under enormous pressures as austerity measures gnawed away at them for a decade and then throughout a devastating global health crisis.

“It is women who filled the gaps as schools and nurseries closed and social care was reduced, some of it never to return to the same levels as pre January 2020.

“And women whose jobs are under threat as councils, academies and NHS Trusts do impossible sums to try and meet necessary pay demands with no more income from the Government.

“Austerity 2.0 would be a disaster for all of us and no more so than the women, disabled people, children, and people from ethnic minority backgrounds who rely most on public services. It would also wind back the clock on women’s economic equality.”

The Women’s Budget Group are calling for:

• Uprating budgets and grants to local authorities in line with the increase in the level of prices. Funding for public bodies should at least maintain the real value set out in the last spending review, taking into consideration soaring price levels.
• Increase public sector pay, aligned with the increase in the inflation rate. To build strong public services it is necessary to attract and retain workers, offering well-paid and secure jobs. Maintaining the real value of wages should be considered as a minimum.
• Medium-term plan to increase public spending, aiming at, at least, to restore service standards to pre-austerity levels. In the long term, public spending should increase sustainedly to properly respond to population growth and demographic change.
• Reform of the taxation system to increase revenues and fund public spending. The tax system should move towards equivalent taxation of earnings and other types of income, such as capital gains and wealth.
• Investment in the care economy. Previous WBG research has shown that investing in social infrastructure has important employment effects, with the capacity to increase overall employment by 5% and reduce the gender employment gap.

 

Table 1: Service RAG ratings, October 2022

Funding for health, social care, education, and other public services, is not sufficient to return to pre-pandemic standards

Institute for Government (2022), Performance Tracker 2022.

 

Figure 2: growth rates for wages in the private and public sector

In the last year, public sector pay has grown less than in the private sector, and way below the inflation rate.

Notes: Average weekly earnings annual growth rates for total pay, private and public sector. Source: Average weekly earnings in Great Britain: October 2022, ONS. Inflation rate calculated based on CPI annual rate 00: All items 2015=100. Source: Consumer price inflation time series, ONS.

Read the full briefing here.

^[1] OECD (2022), General government spending (indicator)

^[2] H. Wakefield (2022), Spring Budget 2022 Pre-budget Briefings: Local Government and Gender, WBG

^[3] Institute for Government (2022), Performance Tracker 2022

^[4] NHS Confederation (2022) New focus, old problem: tackling delayed discharges this winter and beyond

^[5] Institute for Government (2022), Performance Tracker 2022

^[6] B. Boileau, L. O’Brien, B. Zaranko (2022) R219 IFS Green Budget 2022 – Chapter 4

^[7] County Council Network (2022) Cost of living crisis: councils face winter of ‘difficult decisions’ as spiralling inflation adds £1.5bn to costs

^[8] NAHT (2022) Majority of schools looking at redundancies due to funding crisis, largest survey of school leaders shows

^[9] NHS (2021) Gender pay report (2020)

^[10] Workforce Intelligence (2022) The state of the adult social care sector and workforce in England

^[11] GOV.UK (2021) School teacher workforce

^[12] Women’s Budget Group (2021)

^[13] Centre for Progressive Policy (2021), Women in the labour market

^[14] https://wbg.org.uk/analysis/intersecting-inequalities/

— ENDS —

About the Women’s Budget Group

The Women’s Budget Group is an independent network of leading academic researchers, policy experts and campaigners. Our vision is of a caring economy that promotes equality between women and men.

 For more information or further comment, contact

Erin Mansell, Head of Communications and Public Affairs: erin.mansell@wbg.org.uk

or

press@wbg.org.uk