AN EXTRA £19 billion in spending cuts or tax hikes must be found to combat the UK's strained healthcare system amid an ageing population, it has been claimed.
Official forecaster, the Office for Budget Responsibility (OBR) said the government would need to find the additional savings in the year to April 2019 on top of the current £153bn in austerity measures to get debt down to 40 per cent of economic output.
If no action is taken, the burden of an ageing population in terms of pensions and healthcare will wipe out much of Chancellor George Osborne's spending cuts, leaving the UK with a £65bn hole in its finances, according to the OBR.
In its annual fiscal sustainability report, it said: "It is clear that longer-term spending pressures, if unaddressed, would put the public finances on an unsustainable path.
"Public sector net debt would approach 100 per cent of gross domestic product (GDP) and still be rising."
The OBR said the move to a single-tier state pension had slightly eased the pressure on public sector debt but added that spending on healthcare was the biggest spending pressure over the next 50 years.
The OBR said the cost of the state pension was predicted to rise from 5.8 per cent of GDP to 8.4 per cent of GDP as the population ages, even with the introduction of the new flat rate payment system and increase in retirement age to 67 taken into account. healthcare spending is expected to increase from seven per cent of GDP to 8.8 per cent of GDP, while long-term social care costs are set to rise from 1.3 per cent of GDP to 2.4 per cent of GDP.
Britain's chief secretary to the treasury Danny Alexander said the OBR's report shows that without the steps taken over the past year, public borrowing would be around 50 per cent of GDP higher in 50 years' time.