# United Kingdom government austerity programme Canonical: https://web4.xpay.bi/en/wiki/wp-en-34366992/ Language: en Published: 2026-10-25T23:12:32.818Z Updated: 2026-10-25T23:12:32.818Z The United Kingdom government austerity programme was a fiscal policy that was adopted for a period in the early 21st century following the era of the Great Recession. Coalition and Conservative governments in office from 2010 to 2019 used the term, and it was applied again by many observers to describe Conservative Party policies from 2021 to 2024, during the cost of living crisis. With ## Key facts ## Overview The United Kingdom government austerity programme was a fiscal policy that was adopted for a period in the early 21st century following the era of the Great Recession. Coalition and Conservative governments in office from 2010 to 2019 used the term, and it was applied again by many observers to describe Conservative Party policies from 2021 to 2024, during the cost of living crisis. With the exception of the short-lived Truss ministry, the governments in power over the second period did not formally re-adopt the term. The two austerity periods are separated by increased spending during the COVID-19 pandemic. The first period was one of the most extensive deficit reduction programmes seen in any advanced economy since the Second World War, with emphasis placed on shrinking the state, rather than consolidating fiscally as was more common elsewhere in Europe. The Conservative-led government claimed that austerity served as a deficit reduction programme consisting of sustained reductions in public spending and tax rises, ostensibly intended to reduce the government budget deficit and the role of the welfare state in the United Kingdom. Some commentators accepted this claim, but many scholars observe that its primary, largely unstated aim, like most austerity policies, was to restore the rate of profit. Most prominent economists agree that austerity is ineffective if the aim is to bring about a recovery from recession. Successive Conservative governments claimed that the National Health Service and education had ostensibly been "ringfenced" and protected from direct spending cuts, but between 2010 and 2019 more than £30 billion in spending reductions were made to welfare payments, housing subsidies, and social services. There was no central function or risk assessment made to predict the impact of the austerity programme on services and budgets in the long term. There were however "big strategic moves" to protect groups more likely to vote Conservative, and make cuts elsewhere. This meant that the older groups like pensioners were largely protected, and the 2015 Conservative general election victory is credited to this tactic. During the second austerity period, a wider group than before were affected by the resulting cost-of-living crisis. This was connected to declining support for the Conservatives ahead of the 2024 general election, which resulted in a landslide defeat for the party. The Conservatives had planned further measures for after the election, some of which were leaked in advance. The effects proved controversial and the policies received criticism from a variety of politicians, economists, and anti-austerity movements. Various authors and journalists have referred to this period as Britain's "lost decade". The British Medical Association nicknamed austerity "COVID's little helper" and connected British excess deaths to the effects of austerity on public services, however no causal link was shown and was assumed based upon life expectancy not rising in the UK at the same rate as other selected countries, excluding the United States which showed equal stagnation in life expectancy. ## First austerity period (2010–2019) A UK government budget surplus in 2001-2 was followed by many years of budget deficit, and following the 2008 financial crisis, a period of economic recession began in the country. The first austerity measures were introduced in late 2008. In 2009, the term "age of austerity", which had previously been used to describe the years immediately following the Second World War, was popularised by Conservative Party leader David Cameron and future British chancellor George Osborne. The term at the time lacked the negative associations it would develop over the course of the following decade, and was somewhat synonymous with "prudence". In his keynote speech to the Conservative Party forum in Cheltenham on 26 April 2009, Cameron declared that "the age of irresponsibility is giving way to the age of austerity", and committed to end years of what he characterised as excessive government spending. Conservative Party leaders also promoted the idea of budget cuts bringing about the Big Society, a political ideology involving reduced government, with grass-roots organisations, charities and private companies delivering public services more efficiently. Osborne has been more dismissive in retrospect, acknowledging that the modernisation programme was simply the party "trying to win". The austerity programme was initiated in 2010 by the Conservative and Liberal Democrat coalition government. In his June 2010 budget speech, Osborne identified two goals. The first was that the structural current budget deficit would be eliminated to "achieve \[a\] cyclically-adjusted current balance by the end of the rolling, five-year forecast period". The second was that national debt as a percentage of GDP would fall. The government intended to achieve both of its goals through substantial reductions in public expenditure. This was to be achieved by a combination of public spending cuts and tax increases amounting to £110 billion. Between 2010 and 2013, the Coalition government said that it had reduced public spending by £14.3 billion compared with 2009–10. Growth remained low, while unemployment rose. In a speech in 2013, David Cameron indicated that his government had no intention of increasing public spending once the structural deficit had been eliminated, and proposed that these spending reductions be made permanent. The end of the forecast period at the time was 2015–16, but the Treasury extended austerity until at least 2018. By 2015, the deficit, as a percentage of GDP, had been reduced to half of what it was in 2010, and the sale of government assets (mostly the shares of banks nationalised in the 2000s) had resulted in government debt as a proportion of GDP falling. By 2016, the Chancellor was aiming to deliver a budget surplus by 2020, but following the result of the 2016 United Kingdom European Union membership referendum, he expressed the opinion that this goal was no longer feasible. Cuts in spending were not equally applied geographically, leading to some allegations that non-Conservative areas were being systematically targeted. Health expenditure in Blackpool (Labour) fell five times more per person than in Surrey (Conservative). Osborne has denied the cuts were applied in this way, but other Conservative staff members have since acknowledged "big strategic moves" that were made to favour demographic groups more likely to vote Conservative. This meant that the richest 20% of the population were essentially excluded from the impact of cuts. The approach was "devastatingly politically effective" according to Osborne, and is credited with the 2015 election win. British MP David Gauke also stated that this rebalancing had gone too far. Osborne's successor as Chancellor, Philip Hammond, retained the aim of a balanced budget but abandoned plans to eliminate the deficit by 2020. In Hammond's first Autumn statement in 2016, there was no mention of austerity, and some commentators concluded that the austerity programme had ended. However, in February 2017, Hammond proposed departmental budget reductions of up to 6% for the year 2019–20, and Hammond's 2017 budget continued government policies of freezing working-age benefits. Following the 2017 snap general election, Hammond confirmed in a speech at Mansion House that the austerity programme would be continued and Michael Fallon, the Secretary of State for Defence, commented: "we all understand that austerity is never over until we've cleared the deficit". Government spending reductions planned for the period 2017–2020 are consistent with some departments, such as the Department for Work and Pensions and the Ministry of Justice, experiencing funding reductions of approximately 40% in real terms over the decade 2010–2020. During 2017, an overall budget surplus on day-to-day spending was achieved for the first time since 2001. This fulfilled one of the fiscal targets set by George Osborne in 2010, which he had hoped to achieve in 2015. In 2018 the Office for Budget Responsibility (OBR) predicted that in 2018–19, public sector debt would fall as a share of national income for the first time since 2001–02, while tax revenues would exceed public spending. Hammond's 2018 Spring Statement suggested that austerity measures could be reduced in the Autumn Budget of that year. However, according to the Resolution Foundation and the Institute for Fiscal Studies (IFS), the OBR's forecasts for borrowing and debt were based on the assumption that the government continued with the planned spending reductions that were announced after the 2015 general election. By 2018, only 25% of the proposed reductions in welfare spending had been implemented. The Resolution Foundation, a British think tank, calculated that the proposed reduction in spending on working-age benefits amounted to £2.5 billion in 2018–19 and £2.7 billion in 2019–20, with the households most affected being the poorest 20%. The IFS calculated that the OBR's figures would require spending on public services per person in real terms to be 2% lower in 2022–23 than in 2019–20. The deficit in the first quarter of the 2018–19 financial year was lower than at any time since 2007 and by August 2018 it had reached the lowest level since 2002–3. Hammond's aim at this time was to eliminate the deficit entirely by the mid-2020s. At the Conservative Party conference in October 2018 Prime Minister Theresa May indicated her intention to end the austerity programme following Brexit in 2019, and opposition leader Jeremy Corbyn said that austerity could not be ended without significant increases in public spending. The IFS calculated that funding an end to austerity would require an additional £19 billion per year raised through higher government borrowing or tax increases. Hammond's preference was to reduce the national debt with more years of austerity, but in the October 2018 budget he agreed to defer the target date for eliminating the deficit, abandoning plans to achieve a surplus in 2022–23 to allow an increase in health spending and tax cuts. The Resolution Foundation described the step as a "significant easing of austerity". Hammond said that the "era of austerity is finally coming to an end" but that there would be no "real terms" increase in public spending apart from on the NHS. The end of austerity was declared by Hammond's successor Sajid Javid in September 2019, though the Institute for Fiscal Studies expressed doubts that the planned spending in the Conservative manifesto for the 2019 election would constitute a true end to austerity, with spending per capita still 9% lower than 2010 levels. ## Pandemic-era spending (2020–2021) The spending plans were dramatically altered in early 2020, with the following two years characterised by vast spending brought on by the COVID-19 pandemic. The UK suffered its deepest recession in 300 years. Government spending jumped from 39.1% of GDP to 51.9%, widening the deficit to a level not seen even during the 2008 financial crisis, and reversing austerity era efforts to balance national finances. The government abandoned efforts to lower the national debt across the lifetime of the 2019 parliament, as had been planned, instead adopting policies, described by Will Hutton in The Guardian as Keynesian, during the pandemic. The Eat Out to Help Out scheme in particular has been cited as an example of this. ## Second austerity period (2021–2024) Beginning during the latter part of the premiership of Boris Johnson, high inflation, high taxation, and the removal of temporary COVID-era support measures culminated in a cost of living crisis. The Johnson ministry embarked on a series of cuts, which continued throughout the Truss and Sunak ministries. Johnson and Sunak avoided using the term austerity, though it was adopted again by the Truss ministry. The period from 2021 onwards is referred to as a "second era" or "second period" of austerity by many observers. The Johnson ministry made cuts to Universal Credit in September 2021, and this was described by some as an austerity policy. UK in a Changing Europe described the period as "round two", viewing the Johnson government's 2022 spring statement as a turning point similar to the October 2010 statement then delivered by George Osborne, at the initiation of austerity. This view was shared by The Guardian, which described the period from Spring 2022 onward as "another era", and The Telegraph, which termed it "another ill-judged bout". Johnson announced his resignation that July, amid a Conservative rebellion sparked in part over the cost of living crisis. Shortly after the beginning of the premiership of Liz Truss in September 2022, the Secretary of State for Levelling Up, Housing and Communities Simon Clarke announced a "New age of austerity", saying that the country had a "very large welfare state" and that the government would "trim the fat". The scope or detail of these planned cuts were not announced at the time, though by some estimates Truss' tax changes, announced in a mini-budget that September, added 32 billion pounds to an existing 6 billion pound deficit, that would have either required significant borrowing or cuts to fill. It was revealed in 2024 that the Truss ministry considered cutting NHS cancer treatment. The then-unknown cuts and tax changes caused market turbulence over the following week, including a reduction in the value of the pound, rises in government borrowing costs, and the removal of 40% of all mortgage products from the UK market. Facing backlash, chancellor Kwasi Kwarteng denied that there would be new austerity measures the following day, after the government was forced into a U-turn on taxation. The Truss ministry was ultimately unable to enact any of its planned reforms, as Kwarteng was sacked on 15 October and Truss announced her own resignation on the 20th. Rishi Sunak became prime minister after Truss stepped down and quickly announced that a new budget would be forthcoming, with "difficult decisions" made. The government faced higher borrowing costs due to market fallout after the mini-budget and the collapse of the Truss ministry. His plans drew warning from Olivier de Schutter, the UN poverty envoy, who stated that the coming wave of austerity "could violate the UK's international human rights obligations and increase hunger and malnutrition." Sunak's tax rises, alongside major cuts, were referred to as "embracing austerity" by Time. By the time of the 2023 Spring Statement, Britain faced the largest two year decline in living standards since records began in the 1950s, due to persistent inflation, fiscal drag, and taxation at a post-war record high. Further cuts to departments outside of defence and health were planned for the following five years. In 2023, Birmingham city council was forced to issue a 114 notice, effectively declaring bankruptcy, which drew attention to the level of cuts imposed on local government funding since 2010. The Guardian termed this as 13 years of austerity within the local government funding context, however £840m of the councils debts are attributed to equal pay claims and IT implementation failures. The Labour party pledged that there would be "No return to austerity", should they win the 2024 general election. The labour party did indeed win in a landslide, which commentators attributed to the legacy of austerity and the strain it placed on public services. While the Labour party did disavow any further austerity, The Guardian noted that there is no stated plan to reverse austerity either. ## Conservative proposals for after 2024 In 2024, the Resolution Foundation calculated that the government had "pencilled in" further cuts to public services following the 2024 general election. That is, the tax cuts offered shortly before the election were funded by proposed budget cuts to take place in the 2024–2029 parliament, should the Conservatives have won. To balance the budget, these cuts would have had to take place on a scale similar to the first phase of austerity in the 2010–2015 parliament, including around 20% to unprotected departments such as the Ministry of Justice, Department for Levelling Up, Housing and Communities and the Home Office. A leak in April 2024 revealed that the government planned to cut cold weather payments after the election. The Institute for Fiscal Studies commented that based on the plans, "it seems likely the range and quality of public services would have to suffer at some point". When they launched their manifesto that June, the Conservatives confirmed that 12 billion pounds would be cut from welfare. Jeremy Hunt referred to the plans as an "enormous back-to-work programme" in a newsletter during the campaign. At Oxford University he also spoke positively of Liz Truss' economic plans, adding that he wanted to "basically achieve some of the same things that she wanted to achieve." The plans were not enacted in full as the Conservatives were defeated in the election. However, a similar winter fuel cut was enacted by the incoming Labour government. ## Later use of the term In the summer of 2024 the Labour government introduced the means-testing of the Winter Fuel Payment, an annual grant paid to people of pension age, while refusing to relax restrictions on some other benefits. Some commentators referred to this as a new period of austerity. The process of reassessing claims for Personal Independence Payment, a disability benefit, was continued in order to make savings expected to be £150m per year by 2028. After the first budget in October 2024, the BBC however stated that increases in public sector funding meant that "A line \[could\] be drawn under the years of austerity." ## Effects The austerity programme included reductions in welfare spending, the cancellation of school building programs, reductions in local government funding, and an increase in VAT. Spending on the police, courts and prisons was also reduced. A number of quangos were abolished, merged or reduced as a result of the 2010 UK quango reforms. ## Economy Wage growth in the UK was stagnant after the recession, and faced further stagnation and decline throughout the austerity period. After accounting for inflation, wages had declined to 2005 levels by 2023. As the minimum wage continued to increase while overall wages were stagnant, the proportion of workers in minimum wage jobs increased from 4% to 10% in the decade to 2018. The gender pay gap narrowed over the course of the austerity period from 22% in 2009 to 14.3% in 2023; due to a decline in the wages of low-paid men, more of whom were on the minimum wage by 2023. The productivity of the UK's economy was also largely stagnant from 2007 onwards. Productivity began to decline again in early 2022, which tipped the economy back into recession in 2023. Poor economic performance has led some to refer to Britain as the "sick man of Europe", a nickname previously applied to the country during its economic turmoil in the 1970s. The name has been applied in the early 2020s by outside commentators such as The Economist, as well as Conservative party donors. The period is sometimes referred to as the "lost decade", again a term last used to describe the British economy in the 1970s. ## Arts and culture The Local government in England is one of the main contributors to the funding of the arts, spending more than £1 billion annually. However, due to austerity policies and challenges to sustainability in recent years, council spending on arts and culture development has suffered significant reductions. A report by the Arts Council England revealed that arts and culture had suffered a £236 million (20%) decline from 2010 to 2020. By 2023 arts council funding had declined 63% in Northern Ireland, 21% in Wales, and 30% in England. In the Birmingham area, council arts funding will cease entirely in 2026. ## Libraries Public libraries are funded by local governments to provide free services that enrich culture, information and education. The emergence of austerity and subsequent cuts to local government funding has caused library services to suffer – including the closure of almost 800 public libraries since the launch of austerity in 2010. Currently, library services are governed by the Public Libraries and Museums Act 1964, which outlines the duty of local authorities to provide a 'comprehensive and efficient library service for all'. Part of this duty involves an understanding of priorities and financial constraints of local councils, which has specifically been subject to the impact of austerity over recent years. According to the Chartered Institute of Public Finance and Accountancy (CIPFA), there were 3,583 library branches in England, Wales and Scotland that collectively employed 15,300 people alongside 51,000 volunteers in 2019. Prior to this, there were 35 library closures since 2018 and a huge 773 closures since 2010. Library closures have also been reflected in the use of public libraries. CIPFA noted that library visitors across the UK have substantially declined from 335 million annual visitors in 2005 to 215 million in 2019/20. With regards to local government spending on libraries, CIPFA released data to show that spending fell from £1 billion in 2009/10 to £774.8 million in 2018/19 with a further 2.6% decline in 2019/20 to £725 million. These budget cuts have only furthered as a result of the COVID-19 pandemic, accompanied by an increased demand for digital and remote library services. The pandemic has seen an increase of 600% for digital borrowing and an increase of 400% for e-lending. As a result of this, the future of public libraries is uncertain. It may be that following the pandemic, their services could undergo dramatic changes within local communities that are more accommodating to their reduced funding as a result of austerity. ## Museums National museums in the United Kingdom are typically run and funded by the government. However, there are some museums which have separate agreements with local authorities meaning they receive financial support through government programmes. The extent of this funding has been greatly reduced since the beginning of austerity. For example, between 2007 and 2017, museums suffered a 13% reduction in funding, resulting in the closure of at least 64 museums between 2010 and 2019 and visitor numbers halving from 8,000 to 4,000 between 2010 and 2015. Whilst museums are free of charge in order to broaden the demographic of visitors and provide universal access, many museums have had to result to privatisation in order to accommodate budget cuts. 2013 saw the outsourcing of security at the British Museum, followed by the Imperial War Museum in 2014 and the National Gallery in 2015. The budget cuts stemming from austerity have also been exacerbated by the COVID-19 pandemic. A report conducted by the Institute for Fiscal Studies (IFS) highlighted that £5.2 billion has been promised by the government to councils, despite the extra spending of £4.4 billion due to the pandemic and an overall budget pressure of £7.2 billion for 2020/21. This £2 billion budget gap will likely result in greater cuts to services provided by museums. See also: Impact of the COVID-19 pandemic on the arts and cultural heritage ## Child health and poverty Between 1998 and 2012 the number of children living in "relative poverty" in the UK had fallen by approximately 800,000 to a total of around 3.5 million. Following the introduction of the Welfare Reform Act 2012 the number of children in "relative poverty" increased, with the total by 2019 around 600,000 higher than it had been in 2012. During those seven years the number of children obtaining food from the food banks of The Trussell Trust more than tripled. The human height of British children growing up during the years of austerity has decreased: as of 2019, the average five-year-old boy measured 112.5 centimetres (3 ft 8.3 in) and the average girl 111.7 centimetres (3 ft 8.0 in). They were shorter and more obese than many of their European peers. ## Sources - United Kingdom government austerity programme · Wikipedia: https://en.wikipedia.org/?curid=34366992 Source: Wikipedia contributors — https://en.wikipedia.org/?curid=34366992&oldid=1366364512 Licence: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation notice: Reformatted for XPay; the source may be abridged, restructured or translated. Consult the cited revision for the original.