In its analysis of the 2019 Spring Statement, the Institute for Fiscal Studies (IFS) stated that the UK 'urgently' needs an effective Spending Review, in order to take account of public finances and 'the needs of public services'.
The business group said that local government, prisons and the social care sector will 'need to continue to cope', despite 'clear evidence of their current struggles'.
Turning to taxation, the IFS said that the UK tax system 'faces a number of big challenges', including how best to tax digital businesses, and maintain the 'real value' of fuel duties.
The Institute stated that there are 'many ways of raising more revenue', but these need to be carefully thought out and implemented in order for them to be both effective and fair.
Commenting on Chancellor Philip Hammond's Spring Statement, Paul Johnson, Director of the IFS, said: 'Brexit matters, but it isn't the only thing that matters. The need for an effective Spending Review, taking account of the public finance situation and the needs of public services, is urgent. Longer-term challenges cannot be ignored forever.
'Getting policy right on welfare, prisons, pensions, public spending and tax will matter to us all and will require a lot more focus and attention from the government than they seem to be getting.'