£6billion Government cuts

Where the cuts will fall

George Osborne, Chancellor of the Exchequer, and David Laws, the Chief Secretary to the Treasury, today announced £6.24 billion of reductions in public spending – amounting to 2.6% of the government’s overall budget.

The breakdown by department was uneven, with the Department of Communities and Local Government being cut by 7.4%, while the Department for Education was reduced by only 1.2%. The full breakdown by department is below:

The Department of Health, the Department for International Development and the Ministry of Defence were all exempt from cuts.

Details of the cuts:

Ø  The Education ICT agency BECTA, will be abolished, saving £80 million

Ø  Scrapping various quangos (quasi-autonomous non-governmental organisations), saving £600 million

Ø  £1,150 million in reductions in overall government spending on travel, advertising and consultants

Ø  The Child Trust Fund will be scrapped, saving £320 million

Ø  The regional development agencies will be trimmed by £270 million

Ø  Reductions in grants to local authorities from central government will save £704 million

Ø  A freeze in civil service recruitment will save £120 million

The current government deficit is £156 billion.

Introducing the document setting out these reductions, David Laws argued: “Our high public debts threaten financial stability.”

 “This is only the first step on what will be a long road to restoring good management of our public finances. Even tougher decisions undoubtedly await us.”

“We are hoping that we will be using a scalpel rather than a chainsaw.”

The reaction

Alastair Darling, former Chancellor of the Exchequer: "I am concerned about lack of detail where £6bn comes from. There could be thousands of jobs affected and the cuts could damage growth."

"Detail, in this situation, does matter. There's still an awful lot of detail to come out."

Richard Lambert, Director-General of the CBI: "It is encouraging that the Treasury has managed to find slightly bigger savings than first expected. The measures announced by the chancellor, including departmental spending cuts and a civil service recruitment freeze, are painful but necessary steps to demonstrate the UK's seriousness about tackling the deficit.

"Just as private sector firms had to take strong action to cut costs during the recession, so too must the public sector. We believe there is still considerable scope to make even greater savings by re-engineering public service delivery."

Gail Cartmail, Unite assistant general secretary argued that it was a "fundamental economic wrong turn … sucking £6bn out of a still fragile economy".

"While the cuts, such as reductions in civil servants' travel, management consultants and quangos, may appear to be peripheral to the central deficit debate, this is the harbinger of some very painful cuts that will be come in the budget on 22 June and in the comprehensive spending review in the autumn."

Matthew Elliott, chief executive of the TaxPayers’ Alliance: "This is a really good start… Taxpayers have suffered the pain of a recession and rising taxes, and they will welcome the news that a Government is finally making the public sector share the burden. This must only be the beginning - we need to see tens of billions of pounds of cuts in the Emergency Budget in June to start to make an impact on the country's vast deficit. It was refreshing to hear the Chancellor talking about scrapping waste and closing down quangos. At last it seems Westminster is starting to wake up and do the things we have long called for."Back