London: A leading think tank here has observed despite spending cuts of 11.5 billion pounds (over $17 billion) as announced by British Chancellor George Osborne for 2015-16, it may not not be enough to balance government budgets in the medium term. According to Carl Emmerson, director of the Institute for Fiscal Studies (IFS), an economic research institute in London, further consolidation would be needed to get borrowing back down to a sustainable level.
"If those forecasts prove correct further spending cuts or tax rises to the tune of 25 billion pounds by 2017-18 would be required," he added.
The latest round of cuts to balance the budget were not envisaged by Chancellor Osborne when he unveiled his first budget in 2010. However, lacklustre growth has meant his plans have been blown off course. According to IFS director Paul Johnson, radical changes to the level and composition of public spending would continue.
"An announcement that 144,000 public sector jobs would go in one year as part of a programme that could see one million jobs lost by 2017-18 would have created a storm normally. But not now. We seem almost to have got used to this level of austerity," he said. Recent cuts have hit local government, justice and environment while protect health, pensions and schools.