Latest Public Sector News

06.01.14

Osborne announces £25bn more public spending cuts to come

Public spending cuts totalling £25bn will be needed after the next general election to cut the deficit, Chancellor George Osborne has warned, despite the brightening economic outlook and rising business confidence.

It is the first time he has put a precise number on the expected cuts, which Osborne said that under a Conservative government would focus heavily on welfare, rather than departmental budget cuts.

Osborne suggested that scrapping housing benefit for under-25s and restricting council housing for those earning over £65,000 a year could help to achieve the necessary cuts. Speaking during an interview with BBC Radio 4’s Today programme, he said cutting universal benefits for pensioners, which go to wealthy older people as well as those in need, such as the free TV licence, bus travel, and the winter fuel allowance, would not be a good way of finding the money and would be the wrong priority.

Labour warned that the government was creating a living standards crisis.

In his speech later Mr Osborne is expected to warn: “As a result of the painful cuts we've made, the deficit is down by a third and we're borrowing nearly £3,000 less for every one of you and for every family in the country. That's the good news. The bad news is there's still a long way to go.

“We've got to make more cuts. That's why 2014 is the year of hard truths – the year when Britain faces a choice.

“Do we say 'the worst is over, back we go to our bad habits of borrowing and spending and living beyond our means and let the next generation pay the bill'?

“Or do we say to ourselves 'yes, because of our plan, things are getting better - but there is still a long way to go and there are big, underlying problems we have to fix in our economy'?”

Tell us what you think – have your say below, or email us directly at opinion@publicsectorexecutive.com

Image c. M. Holland

Comments

DH   06/01/2014 at 12:07

Strange view of reality from Mr Osborne, as he has already borrowed more in 3 years than Labour did in 13 years. His deficit reduction is a mirage, supported by creative accounting and a house price bubble. So, instead of tightening tax evasion/avoidance measures, taxing the still maverick banks and investing in Britain's future, reducing or doing something positive about the pensions burden, he's busy cutting benefits for the hard working poor and young people. Disgraceful idealogical behaviour that will drive the UK towards becoming a third world economy comprising subsistence wages and wasted youth. Maybe he should go back to school to learn some economics?

Dominic Macdonald-Wallace   06/01/2014 at 12:09

This is no surprise. It really hurts that the government are to make further cuts as many of my colleagues will find themselves looking for work in a virtually non-existent public sector job market, but we new that almost 80% of the cuts were to come from 2014 onwards. Once we get past that reality, this is an opportunity for the public sector to re-order itself. Many leaders have said in the past that if they were to design the public sector from scratch, they would not organise it as it is now. Well here is there chance. Never waste a crisis!

Matthew   06/01/2014 at 12:28

They wont consider benefit cuts for the elderly as this would affect their primary voting audience. The fact is many large homes are taken up by older people who should consider downsizing, or be willing to pay more for their rent to help develop more new family size homes. And - why why why is it the wrong priority to remove benefits such as the winter fuel allowance from people who do not need it? Young people who cant be bothered to vote have now lost their voice.

John Farrar   06/01/2014 at 16:15

I struggle to see how this is practical , I work for an organisation that Houses the under 25's and the cost of not providing social housing for them will be far greater in the long run than savings from Housing Benefit , this is simply another move that will increase the social divisions in our society but then that is all that George understands and believes in

Plain Speak   06/01/2014 at 17:17

Pity that Mr.O, does not have a more holistic approach: i.e. a number of options for reducing the deficit. A paranoid approach on focussing on welfare implies a need for ideological change on the most vulnerable rather than delivering the savings required. The better-off are willing to contribute by foregoing child benefit (those earners over £50k), higher taxes, foregoing free bus passes if ONLY they were asked! Better that than have a widening gulf between rick and poor (as seen in the latin american/developing countries and their soaring crime levels).

Ian George Sam's   07/01/2014 at 21:44

Those pensioners that paid into private pensions had their expected returns cut when HMG taxed interest on private pension funds. This was on John Major's watch and probably in an attempt to balance the books after 'Black Tuesday'. The same pensioners faced mortgage rates of 15% under Labour's 'winter of discontent'. It would be iniquitous to rob them of the benefits they paid in for over working lives of 40/50 years. More cuts? Yes if needed to get us out of the mess Labour left us in but hardly justifiable to take away from those who have invested in their own futures with the effect of reducing their dependence on the State. The Chancellor is right to rule this out. It will encourage those who work hard to save and minimise their future dependency to the advantage of those who come after.

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