San Diego, CA
UK PM Starmer warns of ‘painful' October budget to tackle shortfall in public finances
- U.K. Prime Minister Keir Starmer on Tuesday told the nation that the upcoming October budget would be “painful,” as he paves the way for government spending cuts to address a £22 billion ($29 billion) financing shortfall.
- Starmer said the U.K.’s public finances were “worse than we ever imagined” and that “difficult” decisions lay ahead, after he announced plans to test winter fuel payments made to pensioners.
LONDON — U.K. Prime Minister Keir Starmer on Tuesday told the nation that the upcoming October budget would be “painful,” as he paves the way for spending cuts to address what the government says is a £22 billion ($29 billion) financing shortfall.
“We have no other choice given the situation that we’re in,” Starmer said in a speech in the gardens of 10 Downing Street, the prime minister’s residence.
“Those with the broadest shoulders should bear the heavier burden, that’s why we’re cracking down on non-doms,” he added, referring to U.K. residents whose domicile is outside of the country for tax purposes.
“Those who made the mess should have to do their bit to clean it up, that’s why we’re strengthening the powers of the water regulator and backing tough fines on the water companies who have let sewage flood our rivers, lakes and seas,” Starmer said. “But just as when I responded to the riots, I’ll have to turn to the country and make big asks of you as well, to accept short-term pain for long-term good, the difficult trade-off for the genuine solution.”
Starmer’s Labour party took power in early July following a landslide election victory. The U.K. parliament is on a summer break between July 30 and Sept. 2, although the new government has been navigating challenges including a series of riots around the nation involving far-right groups and a capacity crisis in the prison system.
The Labour administration has meanwhile benefitted from the ongoing fall in inflation, which is hovering around 2%, from the start of interest rate cuts by the politically-independent Bank of England and from the economic return to growth for the past two successive quarters.
In its electoral manifesto, Labour said it would raise £7.35 billion ($9.71 billion) by 2028-29 to fund public services through measures including closing tax loopholes on nondomiciled individuals, removing tax breaks for independent schools, closing what has been described as a “tax loophole” for private equity investors, and introducing a “time-limited windfall tax” on oil and gas firms.
Starmer and Finance Minister Rachel Reeves have repeatedly stated they will prioritize economic growth and fiscal responsibility in their policymaking.
In his Tuesday speech, Starmer said the U.K.’s public finances were “worse than we ever imagined” and accused the previous government of masking a £22 billion “black hole.”
Labour announced the shortfall figure at the end of July and blamed it on overspending and poor budgeting by the previous Conservative government.
Former Finance Minister Jeremy Hunt in July wrote to Simon Case, the head of the British civil service, labeling Labour’s claims about the public finances “deeply troubling.”
Hunt said the alleged £22 billion gap differed from the “main estimates” for spending presented for approval before Members of Parliament on July 17. He added that the disparity in figures risked bringing the politically-neutral civil service into disrepute, since estimates are signed off by its senior officials.
The Institute for Fiscal Studies, an independent research group, has previously argued Labour was aware of the “broad outline” of the size of the deficit and was not upfront during the election campaign about the cuts and tax rises that would be needed to maintain public services.
“Growth — and frankly, by that I do mean wealth creation — is the number one priority of this Labour government,” Starmer said on Tuesday.
Starmer said he had not wanted to take the path to means test the Winter Fuel Payment, a payout for pensions, in a move that has been controversial even within his own party — but added that more “difficult” decisions would come.
Starmer said taxes would not rise for “working people” in the October budget, although he did not supply additional details. Labour has previously pledged not to increase value added tax, national insurance — a general taxation — or income tax.
The speech was criticized by politicians from other parties.
“Keir Starmer says cutting the winter fuel payment is a choice he had to make. But when asked about a wealth tax – Rachel Reeves said their spending commitments didn’t require extra investment. So his tough choices are to not tax wealth of billionaires,” Zack Polanski, deputy leader of the Green Party, said on social media network X.
Conservative politician Kemi Badenoch, a frontrunner to replace Rishi Sunak as party leader, said the speech showed that Starmer “campaigned on promises he couldn’t deliver and now he is being found out,” according to BBC News.
Liberal Democrats leader Ed Davey meanwhile stated that the Conservatives left a “toxic legacy” that needed “bold and ambitious action from the government to fix.”
CNBC has contacted the Conservatives for comment.
Financial markets and investors are still waiting for concrete announcements from the government, David Denton, technical consultant at investment management firm Quilter Cheviot, said in a note.
“During Labour’s election campaign, the party emphasised the various taxes it would not seek to raise, such as National Insurance, VAT, and income tax. Therefore, an increase in Capital Gains Tax (CGT) seems plausible,” Denton said. “An alignment with income tax rates or even a minimal increase might impact investor behaviour.”
He added, “Another potential problem is that unless anti-forestalling measures are announced with any plans, we could see a surge in property on the market as homeowners rush to sell investment properties before new legislation comes into place.”
San Diego County opened its eighth crisis stabilization unit in El Cajon on Monday, providing the same short-term resource for East County residents that has helped relieve pressure on hospital emergency departments in communities to the north and south.
The newest facility replaces a former county assessor’s satellite office at South Magnolia and West Douglas avenues, near the city’s community center and library.
The El Cajon $28 million crisis unit has 12 recliners and a freshly renovated space for private consultation, accommodating residents in need of immediate mental health services for up to 24 hours.
Pioneered in a handful of local hospitals, the county began opening stand-alone crisis units in Vista and Oceanside in 2021 and 2022. The pair of locations were a direct response to Tri-City Medical Center closing its behavioral health unit and crisis center in 2018, citing the need for prohibitively expensive repairs and difficulties with staffing.
Another unit attached in Chula Vista, attached to Bayview Hospital, a behavioral health facility, opened in 2023 with an additional unit attached to the emergency department at Sharp Chula Vista Medical Center in March.
Nadia Privara-Brahms, the county’s behavioral health director, said during a ribbon-cutting ceremony Monday morning that the heavy investment in crisis centers has drastically reduced mental health care visits to local emergency departments. County data for the 2024-25 budget year estimates that 11,000 adults treated at crisis stabilization units were diverted from inpatient care and 14%, approximately 1,800, were connected to inpatient care.
“Countywide, we have seen that this model of care is working,” Privara-Brahms said. “Across the CSUs locally, we saw 85% of admissions diverted from inpatient care.”
County Supervisor Joel Anderson, whose district includes most of East County, kept the pressure on for a center to the east capable of delivering the same kind of results.
“Right now, many of these folks end up in our emergency rooms, and they’re getting great service at the highest cost,” Anderson said.
Emergency departments, he added, can only do so much to focus on providing mental health care when they must also treat the full range of other medical needs from heart attacks and strokes to broken bones and chronic disease.
“Here, we’re laser-focused on that mental health, and we’ll be able to turn people around, stabilize them, and send them home,” Anderson said.
A key innovation with stand-alone crisis units has been the ability of law enforcement officers and crisis response team members to deliver residents picked up on 5150 holds for evaluation, skipping emergency departments when a patient needs mental health care, but not other services. A 5150 hold occurs when a first responder suspects that a person may be a danger to themselves or others or gravely disabled.
Because all emergency departments must operate on a triage basis, continuously moving the most-critical cases to the front of the line regardless of how long those with less-immediate medical problems have been waiting, 5150 holds are notorious for their ability to take first responders off their beats for hours per incident.
The county’s data tracking system indicates that drop-offs at crisis units take 20 to 25 minutes, contributing significantly to getting law enforcement officers and crisis team members back in service much more quickly than was previously the case.
When we think of May, we think of Mother’s Day, blooming flowers, sunny skies, and lots of fun, seasonal events in the city. This month, locals can dine on the creations of James Beard Award-Winning Chefs at Rancho Bernardo Inn, or take advantage of berry season at the annual Vista Strawberry Festival. Theatre lovers can enjoy a showing of Kim’s Convenience at The Old Globe, while the San Diego Natural History Museum invites art enthusiasts to view its latest marine-themed exhibit. Grab your tickets and crack open that planner. Here are all the best things to do in San Diego this month:
Concerts & Festivals | Theater & Art Exhibits | More Fun Things to Do
Concerts & Festivals in San Diego This Month
29
Louisiana legend Juvenile, enhances by the live instrumentation of The 400 Degreez Band, will perform career hits and his newest album, Boiling Point, at House of Blues San Diego.
Theater & Art Exhibits in San Diego This Month
5/5–6/1
Turning the spotlight on contemporary LGBTQ artists, the inaugural ArtSpectrum 2026 will showcase both the grand and intimate scale of contemporary painters, photographers, and mixed media artists at Village Arts Outreach in Balboa Park.
12–24
The only ordinary element of the San Diego International Fringe Festival is the constant thrill of the extraordinary. Discover a plethora of innovative performances at venues from Pacific Beach to Baja.
5/15–6/14
A Korean-Canadian family balances tradition and assimilation from their Toronto storefront in Ins Choi’s comforting satire Kim’s Convenience, making its local premier at The Old Globe.
5/22–2/2027
Ocean debris will receive a new beginning at the San Diego Natural History Museum. Using repurposed pollution, Washed Ashore: Art to Save the Sea depicts creatively sculpted marine life.
More Fun Things to Do in San Diego This Month
4/30–5/3
Enjoy fine dining at its finest from a lineup of gastronomic titans during 54 Hours with James Beard Award-Winning Chefs. Savor elegant meals, masterclasses, tastings, and more at Rancho Bernardo Inn.
2
Unlimited bites, regional craft beers, and animal observations are on the menu for San Diego Zoo Food, Wine & Brew (with live music), a culinary evening in support of the San Diego Wildlife Alliance.
7
Spend An Evening with David Sedaris, humorist, essayist, and best-selling author. Never afraid to point the pen at himself, Sedaris will share old favorites and works in progress in the classic satirical style he’s known for at Jacobs Music Center.
15–17
Say cheese! And toast to the Cheese & Libation Expo. Explore three days of all-you-can eat and drink fare at BRICK, along with boutique shopping and bountiful pairings.
PARTNER CONTENT
10 Years In, Puffer and Malarkey Are Just Getting Started
Elevating an Icon: Inside the La Jolla Beach & Tennis Clu…
16
Stroll the private grounds of several luxurious homes, accompanied by live music, tabletop designs, and outdoor artistry, during the Secret Garden Tour, La Jolla Historical Society‘s flora and fauna fundraiser.
24
Vista recalls its days as a strawberry-producing superpower through its free Strawberry Festival. Wear your berry best fit, watch film screenings, and enter contests for shortcake, pie, and sundae indulging.
San Diego, CA
City considering cutting funding to resource center for those experiencing homelessness
Last week Mayor Todd Gloria released the budget proposal for the 2027 fiscal budget. Protected homeless services is among his top priorities mentioned in the proposal. However, some of the reductions he’s proposing could impact thousands of San Diegans experiencing homelessness.
Located on 17th and K Street, the Neil Good Day Center offers an array of services to nearly seven thousand people experiencing homelessness. The services include giving them a place to shower and do laundry, and connecting them to a case manager, among others.
“These are critical services that are helping people off the streets, but really better their lives and their health and their employment situation as well,” Deacon Vargas with Father Joe’s Villages said.
Deacon Jim Vargas heads Father Joe’s Villages, which runs the center. He said through their prevention and diversion strategies, they’ve managed to keep nearly one thousand individuals from falling into homelessness.
“So by helping them pay rent, or helping them with their utilities, or helping them to reunite with family,” Vargas said.
Right now, the city allocates at least $850,000 per year to the Neil Good Day Center, according to Vargas.
But the future and funding for these services are in limbo because of Mayor Todd Gloria’s proposed budget cuts.
“The impact to those whom we’ve been serving the Daily Center would be very severe,” Deacon Vargas said.
In a statement to NBC 7, Mayor Todd Gloria said in part, “We must find more efficient and cost-effective ways to address this crisis and prioritize funding for programs that provide shelter beds and maximize resources to programs that place people into permanent housing.”
Since it’s still at a proposal stage, Deacon Vargas said it’s unclear how the city will decide to move forward.
However, Deacon Vargas said services would be significantly reduced because they would be forced to operate solely on a budget of about half a million dollars they receive from philanthropy.
“The hours would be cut. Some days would be cut. We would have showers that might be impacted because they’re given seven days a week and we’d close two days a week, then the showers would be five days a week, the case management,” Deacon Vargas said.
Deacon Vargas is certain of one thing.
He would like to continue offering services at the Day Center, even if the city goes through with the funding cuts.
“As we work with individuals at the Day Center and at Father Joe’s Villages, the community becomes healthier as a result of it,” Deacon Vargas said.
The budget also recommends additional cuts to homeless services, but does not give specifics as to where those cuts would be.
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