Osborne announces another £20bn in departmental cuts

Chancellor George Osborne has announced an additional £20bn in cuts in an effort to “finish the job of fixing public finances”, according to a government report released today (21 July).

After announcing £12bn cuts from welfare and £5bn from addressing avoidance, evasion and imbalances in the tax system, Osborne has established another savings goal “required to eliminate Britain’s deficit by 2019-20”.

Full details of his spending review and departmental budget cuts will be announced to MPs on 25 November.

Chief secretary to the Treasury and close Osborne ally Greg Hands MP will today write a letter to government departments asking them to draw up plans to find the billions of pounds in cuts.

Departments will be required to model two scenarios – 25% and 40% of ‘savings’ – within their resource budgets in the next four years (in real terms), according to the report.

By the end of 2015-16, the government will have cut a total of £98bn from public spending.

Osborne said: “This spending review is the next step in our plan to eliminate the deficit, run a surplus and ensure Britain lives within its means.

“We’ll invest in our priorities like the NHS and national security. Elsewhere in government, departments will have to find significant savings through efficiencies and by devolving power, so people have a greater say over the issues that affect them and their communities.”

The chancellor will also expect ministers to identify how they will help achieve the Tory goal of selling public sector land “for at least 150,000 homes” by the end of their government.

The government currently owns £300bn worth of land and buildings with the Ministry of Defence alone owing around 1% of all UK land.

He will also meet with Treasury permanent secretary Nicholas Macpherson at 2.15pm today for questioning from MPs on the summer budget.

Launching spending review 2015, the chancellor also noted that the Local Growth Fund, recommended by Lord Heseltine, will play an important part of the government’s commitment to empower local places with the tools they need to drive economic growth.

Autumn Statement 2013 confirmed that central government departments will devolve at least £12bn from 2015-16 to 2020-21 to the Local Growth Fund. Osborne added that as part of the spending review, the government will identify which budgets will be devolved into the Local Growth Fund to support economic development across the country.

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Top image taken during summer budget announcement, c. Matt Dunham


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