The emphasis around this has been focused on cuts in order to reduce our debt. However, counter-intuitive as it might be, the key Treasury figures in the CSR show that total spending increases over this period, as does the debt interest.

**1. ****Total Spending… increases…6.2%**

Total spend in 2014/15 will be £740bn, an increase of £43 billion or 6.2%. (Given these are such big and critical numbers, it is wonderfully coincidental that this the same as the current level of debt interest payments).

**2. ****Debt Spending…. increases even faster…46%**

**3. ****Total spending ****excluding debt… increases more slowly…3.6%**

When debt is excluding from total spending, the percentage increase in spending nearly halves to 3.6% (from 6.2%). That’s an increase from £654bn to £677bn over the CSR period.

**4. ****Debt as a proportion of spend…increases…to 8.5%**

Over the CSR period, that 45% increase in the debt spending means that debt as a proportion of total spend increases from 6.2% to 8.5% by 2014/15 .

**5. ****Overall…increases, especially debt.**

So, spending is increasing in absolute terms, but debt spending is increasing faster, so debt is a bigger proportion of spending at the end of the CSR than at the beginning.

**6. ****And inflation….means reductions.**

There will be an inflationary factor to take into account but these overall figures provide a relative picture. But this analysis is based on the figures as presented in the CSR.

The latest inflation figures from the Bank of England show inflation at 3.1%, above the 2% target. Assuming 3% year on year inflation over the life of the CSR means that the £740bn in 2014/15 is actually worth around £657bn in real terms. So compared to the £697bn in 10/11, a reduction of £40bn or 5.7%. Substituting 2% inflation makes this £11bn or £1.6% reduction.

Sources: Bank of England: Inflation Report November 2010. 10.11.2010. HM Treasury: Comprehensive Spending Review 2010. 20.10.2010