THE UK Treasury has told senior Whitehall officials that a post-2015 election government will have to make £25bn-£30bn worth of spending cuts.
Cuts are being sought from permanent secretaries to cover the financial years of 2016-17 and 2017-18.
The planned cuts would have a massive impact on departments – the Department of Communities and Local Government is already facing eventual cuts since 2010 of 80%.
The location of the spending cuts will not be made public until the 3rd December Autumn Statement.
Whitehall’s most senior civil-servants have been told by the Treasury to draw up details of the extra public spending cuts before the general election.
The cuts being sought from permanent secretaries would cover the two years after the existing agreed spending review period comes to an end in April 2016, and so would cover the financial years 2016-17 and 2017-18.
However the public commitment by Cameron to ‘protect’ spending on the NHS from cuts would mean that the impact will be felt more severely elsewhere.
Cuts will be made to the police, the Ministry of Defence, legal aid and the business department including further education funding, student maintenance loans and science research.
Addressing the Conservative Party Conference in Birmingham on 29 September, Osborne said that he will freeze working age benefits for two years, with public sector wages also set to be frozen in the next parliament should the Tories win next year’s elections.
A future Tory government would reduce the benefits cap to £23,000 and Housing Benefit will also face cuts.
Osborne said the measures will ‘save’ the economy £3bn, which will be pumped straight into a programme to create 3 million new £2,67 pr/hr low pay apprenticeships.
Osborne has vowed to run an absolute surplus in the public finances by 2018-19 but has not made any detailed indication on how cuts could be made.
The consequence is the combined annual budget of non-protected departments such as local government and defence will come down by a third in real terms from £144bn in 2014-15 to £96bn in 2018-19. Osborne has said he could reduce these cuts by as much as £12bn if he can find cuts to working-age welfare.
