Houdini Hunt is rumbling about behind the sofa cushions in search of funding for pre-election tax cuts, an endeavour that fails to take account of the inseverable link between public services and overall living standards. Yes, many are being squeezed hard by the surging cost of living, and in these circumstances who wouldn’t welcome a bit more cash in their pocket? But there’s little point if the overall direction of travel is relentless decline.

With the UK having fallen into recession at the end of last year, the Chancellor has considerably less wriggle room on spending than previously projected. The latest forecast from the Office for Budget Responsibility – which has been handed over to the Treasury and will be made public tomorrow – reportedly shows headroom of about £13 billion before Mr Hunt comes up against his self-imposed rules on government debt as a share of the economy. That compares to some £30bn in November of last year.

READ MORE: Budget build-up marked by 'excitement and trepidation'

And so Mr Hunt spent this past weekend playing down suggestions of a big package of giveaways in tomorrow’s Spring Budget, only to be upended by yesterday’s bombshell polling figures from Ipsos showing that support for the Tories has plunged to its lowest since 1978 with just 20% of voters now backing Rishi Sunak’s Conservative Party.

Amid fevered speculation over what’s in and what’s out in tomorrow afternoon’s announcement, most experts are still expecting a further cut to the level of National Insurance paid by employees on their salaries. A less likely alternative would be an end to the policy of “fiscal drag” by raising the tax-free personal allowance to take account of wage inflation that has been running at high levels to keep up with prices.

To do either, the Chancellor must scrape together money from elsewhere. Some of the options that have been mentioned are an increase in air duty on travellers flying business class, a tax on vaping, or raiding the Labour Party’s policy arsenal by abolishing the tax breaks given to some of the UK’s wealthiest residents via non-domiciled status. The latter would be striking in that Mr Sunak’s wife, Akshata Murty, has previously enjoyed non-dom status.

In a wearying wave of déjà vu, Mr Hunt is also said to be looking at a fresh squeeze on public spending – this at a time when certain public services, such as local government, are already on their knees.

One of the biggest barriers to improved and sustainable economic growth is the UK’s decaying public realm. This is in terms of both infrastructure such as travel, communication and energy networks, and with regard to the skilled workforce needed to boost productivity.

A fresh analysis published yesterday by the Joseph Rowntree Foundation shows that voters are currently more anxious about funding for the NHS and other public services than the level of tax on their earnings. In a poll of nearly 5,000 people, the charity found that almost three-quarters were “very worried” or “fairly worried” about public services including the NHS, compared to less than half who were concerned about tax and earnings.

This isn’t strictly a social (or political) issue. New research out today from the CBI and the Fraser of Allander Institute highlights the importance of addressing long-term ill-health and boosting infrastructure investment if Scotland is to improve its flagging economic performance.

READ MORE: Sunak in energy row as Chancellor mulls extending windfall levy to pay for tax cuts

Their headline findings show that Scotland lagged in 10 of the 13 productivity indicators for which comparable data is available with the rest of the UK. In addition, the percentage of people in Scotland who were economically inactive between October 2022 and September 2023 due to long-term sickness remained the highest of the four UK nations at 37.1%, compared to an average of 25.8%.

Mairi Spowage, director at the Fraser of Allander Institute, says there is still “plenty of work needed” to improve workforce skills and health.

“A key plank of the National Strategy for Economic Transformation (NSET) is on getting people back into the jobs market via investment in employability programmes,” she said.

“However, despite a 10-year strategy, NSET is already being reviewed and refreshed. Some of the investment needed to support people back into work has often been subject to in-year budget cuts in the last two years, which means it has not materialised.”

READ MORE: CMA calls for 'significant intervention' in UK housebuilding

NSET is an initiative of the Scottish Government, which should rightly be held accountable for its delivery, but there is also no getting away from the fact that any public spending squeeze that Mr Hunt might introduce tomorrow will have further negative repercussions for health, education, housing, and training budgets in this country which have already suffered at the hands of a “difficult” Scottish Budget passed last week in a final vote by MSPs.

Further choking down on local authority funding – which in Scotland has included a pledge from First Minister Humza Yousaf for a year-long council tax freeze – will hamper many of the structural changes necessary to break out of lethargic economic growth. One specific case in point is the UK planning system, which the Competition and Markets Authority (CMA) last week labelled as “unpredictable” and “protracted”, leading to the under-delivery of new-build homes across Scotland, England and Wales.

Following a year-long investigation into the industry the competition watchdog concluded that many local planning departments are under-resourced and lack up-to-date plans, creating lengthy delays before work on new developments can begin. For “under-resourced” read “under-staffed”. As for long-term strategy, this is difficult to pull together when each member of staff is attempting to do the job of two or three people and is thus in constant firefighting mode.

The CMA has put forward its recommendations on the “significant interventions” needed, but the reality is little will likely be achieved in speeding up planning approvals unless proper resources are in place. Achieving this is wishful thinking if Mr Hunt opts for another round of public spending austerity in his bid to pull a Tory victory out of the General Election hat later this year.