New UK Chancellor to cut £6.25bn of public spending
New UK Chancellor of the Exchequer George Osborne unveiled plans for an immediate £6.25bn (€7.27bn) cut in “wasteful” public spending today – insisting the Government was “getting on with the job” of tackling the deficit.
The Chancellor, standing alongside his Lib Dem deputy at the Treasury, David Laws, said the reductions would be made while maintaining “frontline” services in key areas such as the NHS. He also announced that schools spending would be protected.
Some £500m (€581m) will be “recycled” to boost employment and skills, and the rest will be used to cut the Government’s debt.
“In the space of just one week we have found and agreed to cut £6.25bn of wasteful spending across the public sector,” Mr Osborne said.
Previously only health. defence and international development budgets had been promised protection from in-year cuts.
But Mr Osborne said: “Because we have found these savings, I am able to make a new commitment which we didn’t think possible before.
“I have already agreed that savings for health, defence and international development will be reinvested in their front lines.
“Today I am also able to protect schools funding, funding for Sure Start spending and 16-19 education spending from these in-year cuts.
“Schools will have to become more efficient, like everyone else, but their savings will be reinvested in the classroom this year.”
Mr Osborne said the savings would include:
:: More than £1bn m(€1.16bn) of “discretionary” spending such as consultancy and travel;
:: Nearly £2bn (€2.32bn) from IT programmes, suppliers and property;
:: Over £700m (€814m) from “restraining recruitment” and cutting quangos.
:: More than £500m (€581m) from cutting “low-value spending”.
The savings were based on “strong economic advice” from the Bank of England and the Treasury in favour of “early action to deal with our debt”, the Chancellor said.
It reflected a “decisive shift” around the world towards deficit reduction as a priority.
Referring to a note left by outgoing Labour chief secretary Liam Byrne for Mr Laws, Mr Osborne said: “It’s all very well writing a letter telling us the money has run out; the real challenge is having an answer to that letter.”
He said his theme of “we’re all in this together” meant “cutting wasteful spending while protecting the quality of key frontline public services we all depend on”.
