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UK govt orders review of even deeper spending cuts
Source: Agencies |
July 4, 2010, Sunday
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BRITAIN'S coalition government has asked many departments to plan for possible spending cuts of up to 40 percent, far more than announced in an emergency budget last month, the finance ministry said yesterday.
With Britain trying to reduce a record budget deficit, ministers had been told to expect public spending cuts of about 25 percent in most areas.
But many ministries have now been asked to compile reports on what effect cuts of 40 percent would have on services.
A finance ministry spokesman said departments had been asked to look at a range of possible cuts and that the 40 percent option would form the basis of negotiations in coming months.
"These planning assumptions are not final settlements and do not commit the Treasury or departments to final settlements," the spokesman said. "These assumptions will be negotiated."
The education, health and defence ministries would be spared such unprecedented levels of spending cuts. But most other departments would have to draw up the plans, including the interior ministry, transport and work and pensions departments.
Proposals for how to cut 40 percent of spending must be finalised by the end of the month, although there is no certainty they will form part of official government budgets in October.
Finance minister George Osborne announced the harshest budget in decades last month, cutting spending and raising taxes to avoid the fate of debt-ridden countries like Greece.
It prompted unions to warn of the threat of general strikes to protest against such wide-ranging cuts.
Britain's budget deficit is at about 11 percent of national output and reducing the deficit is the biggest priority of the new coalition government, made up of the centre-right Conservative Party and centre-left Liberal Democrats.
With Britain trying to reduce a record budget deficit, ministers had been told to expect public spending cuts of about 25 percent in most areas.
But many ministries have now been asked to compile reports on what effect cuts of 40 percent would have on services.
A finance ministry spokesman said departments had been asked to look at a range of possible cuts and that the 40 percent option would form the basis of negotiations in coming months.
"These planning assumptions are not final settlements and do not commit the Treasury or departments to final settlements," the spokesman said. "These assumptions will be negotiated."
The education, health and defence ministries would be spared such unprecedented levels of spending cuts. But most other departments would have to draw up the plans, including the interior ministry, transport and work and pensions departments.
Proposals for how to cut 40 percent of spending must be finalised by the end of the month, although there is no certainty they will form part of official government budgets in October.
Finance minister George Osborne announced the harshest budget in decades last month, cutting spending and raising taxes to avoid the fate of debt-ridden countries like Greece.
It prompted unions to warn of the threat of general strikes to protest against such wide-ranging cuts.
Britain's budget deficit is at about 11 percent of national output and reducing the deficit is the biggest priority of the new coalition government, made up of the centre-right Conservative Party and centre-left Liberal Democrats.
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