UK government announces $18bn cut to departments’ spending

By on 26/11/2015
The UK's Chancellor of the Exchequer George Osborne. Photo by UK Treasury

The British government has announced £12bn ($18bn) worth of departmental cuts in its five-year spending plan as it seeks to return to a budget surplus.

Chancellor of the Exchequer George Osborne yesterday published his comprehensive spending review, which sets out how £4tr ($6tr) of government money will be allocated over the next five years.

The total cut to from departments’ day-to-day spending by the end of the decade, amounts to £21.5bn ($32.4bn), but with £9.5bn ($14.3bn) of that to be reinvested, the overall consolidation reaches £12bn.

Osborne said the cuts would be less steep than over the last five years, which saw funding for many government departments fall sharply. They were also less steep than Osborne had flagged earlier this year.

Day-to-day spending will fall by an average of 0.8% a year in real terms, compared to 2% between 2010 and 2015, he said.

With defence and health spending set to rise, and education largely protected, other departments face much bigger cuts than the overall average.

The Department for Transport will be among the hardest hit, according to the government’s spending review document, with a real terms cut of 37% in its day-to-day spending.

Britain’s tax office will have its budget cut by 18%, and the Department of Business, Innovation and Skills, which seeks to improve British competitiveness, will see its budget reduced by 17%, and the interior ministry will see a cut of 4.8%.

Osborne also made the surprise announcement that police spending would be protected in real terms and that counter-terrorism funding would receive a boost.

The move came after police officers had expressed concern that big cuts to their budget could make it harder for the security forces to respond to a Paris-style attack.

Another unexpected funding injection will go to the Government Digital Service (GDS), a unit within the Cabinet Office.

Osborne said that the GDS would receive an additional £450m, while the core Cabinet Office budget will be cut by 26%, matching a 24% cut in the budget of the Treasury.

The GDS was formed in April 2011 tasked with transforming the provision of government digital services and to implement the government’s ‘Digital by Default’ strategy.

About Winnie Agbonlahor

Winnie is news editor of Global Government Forum. She previously reported for Civil Service World - the trade magazine for senior UK government officials. Originally from Germany, Winnie first came to the UK in 2006 to study a BA in Journalism & Russian at the University of Sheffield. She is bilingual in English and German, and, after spending an academic year abroad in Russia and reporting for the Moscow Times, Winnie also speaks Russian fluently.

Leave a Reply

Your email address will not be published. Required fields are marked *