Four government departments agree 30% spending cuts

Politics
Monday 9 November 2015 at 4:00am

Four government departments have provisionally agreed deals on cuts amounting to nearly 30% of their budgets, George Osborne will announce on Monday.

In a speech at Imperial College, London, the Chancellor will state that he has reached "provisional settlements" with the Department for Transport, Department for Local Government and Communities, the Department for Environment, Food and Rural Affairs and the Treasury.

Mr Osborne will say that "resource spending" - the day to day spending of the departments - will be cut by an average of 8% per year over the next four years.

The Chancellor will say that the cuts - designed to help ensure a budget surplus by the end of this parliament - will help "protect working people" by making Britain "more resilient, safe and secure".

During the address, Mr Osborne will also outline plans for around £4 trillion in spending until 2020, including plans for £100 billion on infrastructure, including flood defences and super-fast broadband.

David Cameron said the savings would allow government to prioritise services such as the NHS. Credit: PA

Prime Minister David Cameron said the announcement was "good news", adding: "By making the further savings we need over the course of this Parliament we can prioritise what matters for working families - schools, the NHS and our national security.”

The full details of the government's spending plans will be announced in Mr Osborne's Spending Review in two weeks' time, with the departmental cuts contributing to the government's promise to run a surplus by 2019-2020.

Last month, MPs voted to make it a legal requirement for the government to run a surplus in "normal economic times".

How much more will the government need to be cut?

The government is aiming to save around £20 billion with the help of departmental spending cuts.
However, three of the biggest departments - health, education and defence - are protected.
In total, the four departments which have agreed cuts account for around £22.5 billion of the government's total £337 billion resource spending.
Though exact figures have not been given, an 8% reduction each year from these departments would amount to savings of around £6.4 billion by the end of this parliament - which would leave around £13.6 billion still to find.
George Osborne is also hoping to achieve £12 billion in cuts from welfare.
However, these plans were delayed when the House of Lords voted to oppose plans for tax credit reforms - which amounted to £4 billion in savings.