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New spending measures for Whitehall

Chief secretary to the Treasury Danny Alexander is to announce newWhitehallspending scrutiny measures, in a move to tighten financial management of Government departments.

The departments will also be asked to set aside 5% of their own budgets to be ‘re-prioritised’ if new pressures emerge – rather than relying on Treasury reserves. Alexander will outline requirements for departments to regularly share financial information with the Treasury.

Although spending cuts to reduce the deficit are making good progress, with savings found on rent, advertising, consultants and 17,000 civil service posts, Alexander is set to say: “In an environment of economic uncertainty, with ongoing instability in the eurozone, theUK’s large deficit remains a crucial economic vulnerability. It remains a clear and present danger to stability.

“From now on, all departments must monitor and share spending information with the Treasury on a monthly basis. And that data must be consistent.”

The 5% to be set aside will offer some protection against unpredicted costs, or if new policies need to be funded. Many departments already operate a small ‘unallocated provision’ in their annual budgets, he suggested.

Alexander continued: “In the spending review, we deliberately kept the reserve small in order to get the most money out to departments. It means that departments have to be able to deal with problems that arise from within their own budgets.”

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