I'm afraid to tell you there's no money left

That was the quote left by Labour’s Chief Secretary to the Treasury in 2010. It was a joke – but like many jokes it was true.

And whatever criticisms are made of the Government’s economic and welfare policy that fact mustn’t been forgotten: there isn’t any money to do all the things people would otherwise like to do. The public finances were left in a real and unsustainable mess and most of the growth in the 2000’s was artificial on the back of borrowed money fuelling asset price inflation (mostly houses).

A further constraint is that unlike say Italy or Japan, a lot of the money the Government borrows is lent by people and organisations in other countries. Any interest therefore is paid away from the country and becomes a real cost to the UK economy. It’s therefore essential – really essential - that the Government keeps paying low interest rates – hence the initial determination to keep an AAA credit rating.

From the beginning the Government has had to balance:

- the need to get public spending under control

- the need to do it in a way broadly acceptable to the public

- the benefit of growing the public sector

- the need to reduce the riskiness of banks by reducing their balance sheets and increasing their capital strength

- different priorities of the two parties in the coalition.

And from the beginning the approach to cutting the deficit initially maintained the credit rating and even when it was reduced interest rates on UK government debt remains low


The latest budget has to be seen in this context and it is a good effort to provide some stimulus and help to the economy at a time, to repeat the quote, when there’s no money left. And criticisms of it should reflect the fact: there's no money left.

That informs what the Council has to do. As I've said before, I care about spending money wisely. Quality is important but so is value. Even more important is being transparent about how the money is being spent. It comes from taxpayers: they should be able to see where it goes. I note that the Council tax demand which I've just received does not, as in earlier years, include a summary of next year's budget or this year's outturn. Or, if they were concerned about wasting paper, a reference to where a summary can be found easily. That's a shame and it's something I'd want to change.