UK public expect government spending to rise following pandemic despite concerns about higher taxation and borrowing

• New research finds more than half of UK adults (56%) expect public spending to rise following the pandemic;
• However, 54% also say they do not want government policy to aim for increased spending if it means to higher taxes and government borrowing; 
• Overall public support for more government spending has fallen by five percentage points since last year;
• Older age-groups are more likely to favour higher levels of public spending even if it means an increase in taxation or government borrowing.

The majority of the UK public (56%) expect government spending to rise after the pandemic compared with before the crisis, fuelled by higher levels of taxation or public borrowing, according to new research from Deloitte and the independent think tank, Reform. Just 16% expect public spending to remain the same as it was before the pandemic, and only 10% think it will be lower.

Despite these expectations, 54% do not want government policy to aim for increased spending if it means higher taxes and government borrowing.  Of this group, 30% think that the UK should aim for the same level of public spending after the pandemic as it had before, while 24% believe that the UK should aim for lower taxes and less public borrowing, even if that means lower public spending. 

Overall, public support for higher government spending, even if that means increased taxation and borrowing, has fallen by five percentage points in the last year, from 33% in 2020 to 28% this year.

The findings come from Deloitte and Reform’s annual report on government and public services, State of the State 2021-22, which includes a survey by Ipsos MORI of 5,792 UK adults aged 16-75 years. With the full report published next month, initial findings from the research have been released ahead of the Budget announcement and Spending Review. 

The research reveals a generational divide. It finds that 38% of people aged 55-75 years old are happy with higher levels of taxation and public borrowing to help with increased public spending, compared to 24% of 16-34 year olds and 24% of 35-54 year olds. 

By contrast, just 15% of 55-75s would like to see lower public spending and lower taxes or borrowing to match, compared to 32% of 16-34 year olds and 24% of 35-54 year olds. Some 31% of 55-75s favour retaining the same balance of tax and spending as before the pandemic, compared to 29% of 16-34 year olds and 30% of 35-54 year olds.

Jayson Hadley, head of government and public services at Deloitte, commented: “Off the back of record levels of public spending in response to the pandemic, people are looking at their own financial health and that could be affecting their attitudes towards tax and government spending. Our research shows that the majority of the UK public is expecting spending to increase, but support for this is mixed.

“As the UK Government readies for the Budget announcement – and the first multi-year Spending Review for six years – expectations will need to be managed. For the Government to deliver multiple ambitious initiatives within the same fiscal period, from levelling-up to health and social care reform to net zero targets, all against the backdrop of pandemic recovery, it is likely that more public spending will be required.  

“Decision-makers in government have some tough decisions to make as they seek the right balance between the advantages that comes from higher public spending and the advantages of lower taxation and less borrowing.” 

Charlotte Pickles, Reform Director, said: “This polling gives credence to the Chancellor’s desire to contain public spending. 

“Despite repeated calls for further public sector cash injections, only a quarter of under-55 year-olds support the higher taxes and borrowing that would be required to pay for them.

“With continuing pandemic costs and an ambitious domestic agenda, the Government has a hard task ahead to square that fiscal circle.”

Notes to editors:

Deloitte’s predictions for the Autumn Budget 2021 are available here. 

About the research
Deloitte’s annual State of the State report examines citizen attitudes towards government and public services. The full report, State of the State 2021-22, will be published in early November 2021.

Methodology
Ipsos MORI surveyed 5,792 UK online adults aged 16-75 between 9th and 14th September 2021. Topic areas included: attitudes to taxation and spending, trust in government, public services and businesses, reducing regional inequality, social care and Britain’s future in the world. The results have been weighted to reflect the known profile of the adult population in the UK.  

About Reform
Reform is an independent, non-party, charitable think tank whose mission is to set out ideas that will improve public services for all and deliver value for money.

About Deloitte 
In this press release references to “Deloitte” are references to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”) a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see deloitte.com/about for a detailed description of the legal structure of DTTL and its member firms.

Deloitte LLP is a subsidiary of Deloitte NSE LLP, which is a member firm of DTTL, and is among the UK's leading professional services firms.

The information contained in this press release is correct at the time of going to press.

For more information, please visit www.deloitte.co.uk.