Chancellor Osborne will step up the Coalition’s attacks on public spending in his Autumn Statement today, while handing over another huge tranche of taxpayers money to the privateers.
Most government departments will be informed that they must ‘save’ an extra 1% next year and a further 2% the following year.
Osborne is to claim that this will release £5bn to be handed over to privateers to launch ‘capital projects’.
Of this, £1bn will go towards 100 new privately run but state funded Free Schools and Academies, which are free to set their own curriculum, pay rates, terms and conditions and employ non-qualified people to act as ‘teachers’.
The ground was laid for today’s cut in Whitehall budgets in a ‘mid-term spending review’ carried out by Chief Secretary to the Treasury Danny Alexander, which said many departments were ‘over-achieving’ on planned savings.
Departments have ‘under-spent’ by a total of £3bn over the past two years, Alexander’s review found.
Claiming that there is scope for further ‘efficiencies’, a Treasury official pointed out yesterday: ‘If all departments reduce their administrative spending by the same amount as the Department for Education, they would save almost £1bn by 2014/15’.
Osborne and Alexander briefed the cabinet on their plans yesterday morning.
The Office for Budget Responsibility (OBR) is expected to downgrade its forecasts for growth in figures to be released alongside Osborne’s statement.
The chancellor will confirm that he will miss his targets for reducing Britain’s deficit, and for reducing the deficit as a percentage of GDP.
On Sunday, Osborne admitted that cutting the deficit was ‘taking longer’ than planned.