Regulation  

Government departments asked to make £20bn cuts

Government departments asked to make £20bn cuts

The government has announced the NHS and national security are safe from department cuts as other government departments are asked to make £20bn in cuts to eliminate Britain’s deficit by 2019 to 2020, as part of the Spending Review.

Greg Hands, chief secretary to HM Treasury, will write to government departments asking them to draw up plans to deliver £20bn in cuts.

The government will ask departments to identify, for the first time, how they will help to achieve its target of disposing of public sector land for at least 150,000 homes by 2020.

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The letters will ask departments to model two scenarios of 25 per cent and 40 per cent of savings within their resource budgets by 2019 to 2020 in real terms.

These are the same reductions requested ahead of the Spending Review of 2010, the government added.

However, the NHS, national security and schools are safe from cuts, the chancellor said, while “honouring our commitment to the poorest people in the world”.

This follows on from the Summer Budget, where the chancellor unveiled £12bn savings from welfare and £5bn from addressing avoidance, evasion and imbalances in the tax system will deliver half of the savings needed to eliminate the deficit, over the next four years.

The government said, building on the Summer Budget reforms, the Spending Review will deliver an “ambitious reform programme” and devolve more power and services to local areas.

Since 2010, the government has been revolutionising the use of its property, reducing the size of its estate, getting out of expensive buildings that it no longer needs and releasing surplus public sector land.

The government added that by 2015 to 2016, it will have made savings of £98bn.

The Spending Review will be published on 25 November 2015.

Chancellor George Osborne said: “This Spending Review is the next step in our plan to eliminate the deficit, run a surplus and ensure Britain lives within its means.

“We’ll invest in our priorities like the NHS and national security. Elsewhere in government, departments will have to find significant savings through efficiencies and by devolving power, so people have a greater say over the issues that affect them and their communities. We’ll deliver more with less.”

donia.o’loughlin@ft.com