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Spending Review 2010 – key points at a glance

Wednesday October 20th, 2010

Chancellor George Osborne has unveiled the Government’s eagerly anticipated Spending Review. How will it affect you? Do you agree with the key findings? GO provides you with the key announcements at a glance.

Central government – main announcements

Next year expenditure will be £651bn, it will rise steadily to £693bn by 2014-15.

Debt interest payments will be lower by £1bn in 2012, £1.8bn in 2013 and £3bn in 2014, a total of £5bn over the course of the Spending Review.

Capital spending will be £51bn this year. It will be £2bn more than planned at the time of the budget.

The Chancellor states that there will be 490,000 public-sector job losses, which he believes are “unavoidable”.

Council spending to be cut by 7.1% every year for four years.

Government to save £1.8bn a year by 2014-15 from reform of public sector pensions.

Local Government

Local Government Resource DEL to councils will reduce by 28% over the Spending Review period. Local councils also receive funding from other Government departments and council tax. When grants from other departments are included, the overall reduction in revenue grants will be 26%.

HM Treasury

HM Treasury will reduce resource spending by 33% in real terms, and capital spending by 30% in real terms. The Department’s administration budget will also be reduced by 33%.

Education

The schools budget will increase in real terms in each year of the Spending Review period. But economies in other areas mean that there will be a total real reduction in Departmental resource spending of 3% by 2014-15. Following on from the decision to halt Building Schools for the Future (BSF), capital spending will be reduced by 60% in real terms by 2014-15. The average annual capital budget over the period will be higher than the average annual capital budget in the 1997-98 to 2004-05 period.

Health

In line with the Government’s commitment to protect health spending, overall NHS spending will increase by 0.4% in real terms over the course of the Spending Review period. This includes a 1.3% increase in the resource budget, and a 17% decrease in capital spending. The administration budget will be reduced by 33%, and reinvested to support the delivery of NHS services.

To meet the rising costs of healthcare and increasing demand on its services, the NHS will release up to £20bn of annual efficiency savings over the next four years, all of which will be reinvested to meet rising levels of demand and to support improvements in quality and outcomes.

Transport

The Department for Transport will reduce resource spending by 21% in real terms, and capital spending by 11% in real terms. The Department’s Administration budget will be reduced by 33%.

Communities and Local Government

DCLG’s overall resource will reduce by 51 per cent in real terms by 2014-15. This includes the devolution of over £1.6 billion to local government, without which the reduction would have been 33%. Capital spending will reduce by 74%.

Business Innovation and Skills

BIS will reduce its resource budget by 25 per cent. Taking into account anticipated receipts, the cut to capital spending by 2014-15 will be 44 per cent. The Department’s Administration budget will be reduced by 40 per cent, including savings from abolition of the RDAs.

Home Office

Home Office will reduce overall resource spending by 23% in real terms, and capital spending by 49% in real terms. The police service must play their part in reducing the nation’s deficit. Central government police funding will reduce by 20% in real terms by 2014-15.

Ministry of Justice

Over the course of the Spending Review period, the Ministry of Justice will make a 23% reduction in the resource budget, and a 50% reduction in capital spending. The Department’s administration budget will be reduced by 33%.

Ministry of Defence

The Ministry of Defence (MOD) will reduce resource spending by 8% in real terms, and reduce capital spending by 8% in real terms. The Department’s administration costs will also be reduced by 33%. The Department will make at least £4.3bn of non-frontline savings, of which around £3bn is planned from efficiency programmes, over the Spending Review period.

Foreign and Commonwealth Office

Over the course of the Spending Review period the FCO will see a 24% real terms reduction in the resource budget, and a 55% real terms reduction in capital spending. The Department’s Administration budget will be reduced by 33%.

Department for Environment, Food and Rural Affairs

DEFRA will reduce resource spending by 29% and capital spending by 34%. The Department’s Administration budget will be reduced by 33%.

The Department for Culture, Media and Sport

The Department for Culture, Media and Sport will reduce overall resource spending by 24%. The core DCMS capital budget will reduce by 32%. The total administration budget for the Department and its arm’s length bodies will be reduced by 41%.

Department for Work and Pensions

DWP will increase resource spending by 2% in real terms, with a 6% real terms reduction in capital spending. The Department’s Administration budget will be reduced by 35%.

What are your views on the latest spending measures? Join the debate by hitting the comment button below.

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