UK govt to cut spend up to 40%

2010-07-04 19:42

London - Britain's coalition government has ordered many ministries to plan for spending cuts of up to 40%, far greater than announced in an emergency budget, the finance ministry said on Saturday.

As Britain bids to slash a record budget deficit, departments had been warned to expect spending cuts of about 25%, but many ministries have now been asked to identify where cuts of 40% could be made.

It is the latest step in laying the ground for a spending review to be published in October which is expected to be the toughest since World War II.

The newly created Office for Budget Responsibility has forecast that 600 000 public sector jobs will be lost as Prime Minister David Cameron's Conservative-Liberal Democrat government grapples with the deficit.

Chancellor of the Exchequer George Osborne said last month that the defence and education ministries would receive favourable treatment, but they have now been told to assess the potential impact of cuts of 10% and 20%.

They only departments to escape any cuts will be health and international development, whose funding is "ring-fenced" during the current parliament term.

Record budget deficit

A Treasury spokesperson said: "We are determined to tackle the record budget deficit in order to keep rates lower for longer, protect jobs, and maintain the quality of essential public services.

"The Cabinet has been briefed on the planning assumptions that their departments should use for the initial phase of the spending review.

"These planning assumptions are not final settlements, and do not commit the Treasury or departments to final settlements.

"These assumptions will be negotiated so that we both tackle the deficit and support the freer, fairer and more responsible Britain we want to see."

- SAPA
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