CHANCELLOR Philip Hammond’s optimism in his Spring Statement shows how out of touch the government is, Labour and unions said today.

Marginal rates of growth celebrated by the Tories are the result of shifting the burden of national debt onto public services through cuts in funding, shadow chancellor John McDonnell told MPs.

Office for Budget Responsibility statistics show an upgraded prediction of economic growth for this year from 1.4 to 1.5 per cent.

But this is while doctors, nurses, firefighters and police officers are seeing their numbers reduced and vulnerable children and older people are left without support as council services vanish.

Mr McDonnell said NHS trusts will end the financial year £1 billion in deficit, schools are struggling under the first per capita funding cut since the 1990s and there has been a 40 per cent cut in early intervention funding for children at risk of neglect and abuse.

Last year, 400 women seeking safety were turned away from refuges and nearly 5,000 people are now sleeping rough after the number doubled since 2010, he continued.

“One million vulnerable older people have no access to the social care they need,” he said.

Responding to Mr Hammond’s first Spring Statement, Mr McDonnell told MPs: “His complacency today is astounding.

“We face in every public service a crisis on a scale we’ve never seen before … The Chancellor has proclaimed that there is light at the end of the tunnel.

“But this shows just how cut off from the real world he is.”

National Pensioners Convention general secretary Jan Shortt said that Mr Hammond had missed another chance to address the social care crisis which has left 1.2 million older people living without help.

National Children’s Bureau chief executive Anna Feuchtwang said: “The Chancellor did his best to paint a rosy picture of the country’s economic outlook, but in reality far too little of that prosperity reaches the children and families that need it most.”

And Unison general secretary Dave Prentis said that Britain’s public services “remain in a dark place” despite promises of a “brighter tomorrow.”

He added that the “one ray of hope” was Mr Hammond hinting that the Treasury would fund an NHS pay rise if employers and health unions are able to reach an agreement.

Civil servants’ union PCS general secretary Mark Serwotka said the statement was an insult to public-sector workers who have had years of pay restraint.

He said: “Despite claiming in the autumn Budget that the pay cap was lifted, there is no evidence to back that up.

“Any extra increases being floated are mainly coming out of existing budgets, resulting in further cuts to services. Civil servants not covered by a pay review body are yet to receive a formal offer.

“Our members and all public service workers deserve an above-inflation pay rise.”

The TUC criticised Mr Hammond for choosing to keep capital investment well below the Organisation for Economic Co-Operation and Development average while suppressing public-sector pay.

General secretary Frances O’Grady said the Chancellor should not wait until the autumn Budget to give public workers a pay rise.

The government should set up a national investment bank to update infrastructure, tackle low productivity and create better-paid jobs, Ms O’Grady said.