Brown policies 'mean prudence is lost to profligacy'

Gordon Brown, the Chancellor, is presiding over profligate government spending and has shed his previously prudent approach to the nation's finances, according to the Centre for Policy Studies.

Gordon Brown, the Chancellor, is presiding over profligate government spending and has shed his previously prudent approach to the nation's finances, according to the Centre for Policy Studies.

The think-tank today launches an outspoken attack on Mr Brown's recent record, warning that taxes will have to rise if the Treasury is to meet its self-imposed rules on balancing the nation's books over the course of each economic cycle.

Written by Ruth Lea, the former City economist and head of the policy unit at the Institute of Directors, the report claims that public spending has soared since 1999 to a projected £519bn in 2005 from £322bn in 1997. She argues that the scale of public sector spending as a percentage of gross domestic product is underestimated by official figures.

If GDP is measured after stripping out taxes and subsidies on products, then government spending is equal to 44.3 per cent of GDP rather than the 39.3 per cent figure favoured by the Government, Ms Lea says.

Productivity in the state sector has fallen. Many new Government-funded jobs are "non productive", the CPS report says. It highlights areas such as education, where there are 471,600 non-teachers in administrative roles compared with 444,000 teachers. While the number of administrators in the NHS rose 16.5 per cent in the five years to 2001, the number of beds fell 6.1 per cent. Over the same period recruitment of managers, up 16.5 per cent, outstripped growth in nursing staff recruitment at 9.7 per cent.

"In his first two years he [Mr Brown] adopted the previous Conservative administration's rather strict plans and even in 1999 public spending was under control. But from 2000 onwards the prudent Chancellor was replaced by the Chancellor 'with a purpose'. The profligate Chancellor has replaced the prudent Chancellor," said Ms Lea.