Blog: Coalition cuts will open public eyes

clock • 2 min read

With Iain Duncan Smith setting out the Department for Work and Pensions' general path forward yesterday, we now have a fairly good idea of where those sectors involving the protection and health insurance industry are headed.

Of course, as with most of the coalition Government's plans, it seems serious cost cutting is likely to be taking centre stage.

The £6bn of state spending cuts announced so far amount to just about 1% of the total deficit, so if you thought those initial measures were painful, it might be worth going into hibernation for the next half decade.

But with the state's largest departmental budget (even surpassing the NHS), the DWP is an obvious choice for cutting back.

The benefits and welfare system is a complex and intricate structure (many would say too intricate and complex) that appears set to be untangled.

However, the bottom line is likely to result in benefits being harder to claim and those that are approved being under significantly increased scrutiny, probably including ‘take it or loose it' rules around work offers.

Notably though, many of these policies were already proposed or set in motion by the previous Labour administration - something which was largely ignored throughout the election campaign.

One Labour pledge that didn't make it through was the National Care Service, although that may yet be resurrected.

Encouragingly for the private sector, according to the coalition's manifesto, it will "break down barriers between health and social care funding to incentivise preventative action."

Perhaps this will mean the private care options will feature more prominently in the funding of long term care, which is to be re-considered by a new commission.

That report will be published by the New Year and consider ideas including "both a voluntary insurance scheme to protect the assets of those who go into residential care, and a partnership scheme as proposed by Derek Wanless."

So finally we come to the NHS.

The only government department to not only secure its funding level but receive a pledge of real-terms increases is still likely to be hit by cuts in one form or another.

It faces demands to become more efficient and less administrative heavy, and with the ever spiraling rate of medical inflation, this means services are likely to suffer in one form or another.

All of these new pledges have one thing in common - they present massive opportunities for the private sector to take a part in filling the gaps that are left behind.

For once the Government of the day is going to have to be open about what will and will not be provided for the public through the state benefits, care and health systems.

And its likely to be a shock to many when they realise how little is covered and what they now have to do to take care of themselves.

 

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