Chancellor promises £6 billion Whitehall cuts

20 October 2010

20 October 2010 | Angeline Albert

A total of £6 billion in back office cuts are to be made across Whitehall departments, Chancellor George Osborne said in his Spending Review announcement today.

The figure is double the £3 billion the government originally expected to make.

During his Spending Review, which concerns budgets for each Whitehall department up to 2014-15, Osborne said: “I can tell the House that we have gone further than we thought possible in cutting back-office costs. Quangos will be abolished. Services will be integrated. Assets will be sold. And the administrative budgets of every main government department cut by a third. The result is this: we promised £3 billion of Whitehall savings, we will deliver £6 billion.”

Osborne announced the average budget cut of unprotected Whitehall departments will be 19 per cent during the next four years, which is less than the 25-40 per cent originally expected.

The Cabinet Office budget will reduce by 35 per cent in real terms, from £280 million in 2010-11 to £200 million by 2014-15. The department’s administration budget will be cut by 33 per cent.

The Department for Communities and Local Government's (CLG) resource budget will also be reduced by 33 per cent in real terms, including a 42 per cent cut to administration costs. This will be achieved through the closure of the Government Office network, reducing the number of arms-length-bodies by 17 and reducing the size of the department, Osborne said.

Other key cuts:

•    Treasury's budget to be cut by 33 per cent.

•    HM Revenue & Customs is expected to find savings of 15 per cent. 

•    Home Office will see a 6 per cent cut.

•    Police spending will fall by 4 per cent.

•    The Ministry of Justice must save 6 per cent a year (a fall from £9.5 billion to £7 billion over four years.)

•    The Department for Business, Innovation & Skills will see its budget cut by 7.1 per cent-a-year. 

•    The Department for Environment, Food and Rural Affairs will make budget savings of 8 per cent-a-year.

Total public expenditure will be £740 billion by 2014-15. The budget cuts announced today are part of government plans to reduce Britain’s £109 billion structural deficit.   

Among the ideas being taken forward by the government is centralised procurement of commonly used goods and services, bringing efficiency gains of more than £400 million-a- year, according to the Spending Review document. 

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