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The IFS warned that despite the historic tax hike, the sink would run out of money.

Chancellor رشی سنک۔ The Institute for Fiscal Studies (IFS) has warned that despite historic tax increases, there will be a “shortage of money” to spend on many public services.

With the release of its 2021 Green Budget, economic think tanks say rising healthcare spending in the UK’s elderly population is exceeding the level of funds available for other services, including courts, prisons and local government. ۔

1.25% increase in National Insurance Partnership to cover additional costs on health and social care, the report said. Boris Johnson, May need to double by the end of the decade to meet future demographic pressures.

Meanwhile, the UK economy is expected to shrink by the mid-2020s, as predicted before the epidemic, City’s analysis found. Included in the Green Budget, the analysis estimates that the UK economy will be 2 to 3% smaller in 2024-2025 than the previous estimate, because Bridget. And Covid-19.

Christian Schulz, Citi’s director of European economics, said: “The scars from epidemics alone can’t be as big as we thought last year. The scars from Brexit could actually be bigger.

He added that Bridget was casting a long shadow over the economy.

The IFS also found that public spending was set at 42% of national income, 2% higher than before its epidemic, and the highest level of national income since 1985.

Under these conditions ایک in a shrinking economy and a prolonged period of public spending-the IFS does not expect the Chancellor to offer “unsafe” White Hall departments, including local government, further education, prisons and courts. There will be extra cash when he provides. Its budget is due later this month

In fact, to achieve his goal of balancing the current budget and sticking to planned spending, Mr Sink may need to cut the department’s daily budget by more than 2 2 billion next year. Is. .

The IFS noted that these services had already been significantly cut in the 2010s, and that a second round of cuts would be difficult to reconcile with the government’s stated goal of “smoothing out” the economy.

The think tank explored a number of scenarios in its public finance and spending forecasts, but warned that the uncertainty surrounding these estimates remained “incredibly high”.

If the economy performs better than expected, the 28 28 billion tax increase package announced in the March 2021 budget may be unnecessary to meet the current budget surplus after 2023. In this case, Mr. Sink may abandon some proposed tax increases or reduce other taxes, the IFS said.

However, if things go awry, these taxes may need to be tripled to achieve the current budget surplus by 2025.

Paul Johnson, IFS director and editor of the Green Budget, said: “Rishi Sink, a Conservative Chancellor, is presiding over a record increase in the tax burden in the UK and an increase in the size of the state. Did not see

Yet the combined effects of rising costs on the NHS and the small economy from the expected pre-epidemic disease mean that it still lacks the money to spend on many other public services.

According to central forecasts, after a decade of sharp cuts, there will be little or no scope to increase spending on things like local government, the justice system and further education.

“It still has a lot of uncertainty about the direction of the economy and therefore the state of the public finances,” he said.

Mr Johnson added: “They are hoping that a stronger-than-expected increase in revenue over the next few years will help pull it out of a well-sized hole.”

A Treasury Department spokesman said a departmental budget would be set in the spending review, which would continue to reflect “the public’s top priorities.”

The spokesman added: “The core expenditure of this department will increase by an average of about 44% per annum in this Parliament – an increase of 140 billion Euros in cash and the largest real increase in total departmental expenditure for any Parliament in this century.”

The IFS Green Budget 2021 was published before the Chancellor’s budget and expenditure review, which is expected to be presented on October 27.

With additional PA reporting.

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