Chancellor Osborne unveils spending cuts

UK spending cuts

George Osborne today outlined the coalition Government's planned spending cuts, stating that "urgent action" is needed to combat the UK's budget deficit.

The £6.2 billion package of cuts will include an abolition of child trust funds, cuts in IT programmes and quangos, and a civil service recruitment freeze, although Mr Osborne has been criticized for failing to specify the exact number of jobs which are likely to be lost as a result.

Chief Secretary to the Treasury David Laws has, however, indicated that this is merely the "first step on what will be a long road to restore good management to our public finances" and explained that there will be "even tougher decisions ahead."

Mr Laws and Mr Osborne recently held a series of talks with the Secretaries of State from each Government Department, as well as obtaining advice from the Bank of England, and have outlined the intended cuts to all of Whitehall's departments in an attempt to reduce governmental waste.

Cutting privileges

The Business Department will be hit the hardest, with a proposed cut of £836m, followed by the Department of Communities and Local Government (DCLG) which can expect a cut of £780m. Ministers and civil servants will also see many of their privileges, such as first-class travel and chauffeur-driven cars, taken away.

"We need to tackle the deficit so that our debt repayments don't spiral out of control," said Mr Osborne, "and the more we do now the more we can spend on the things that really matter in the years ahead."

Last year, the Government spent £156 billon more than it gained in taxes and Mr Laws has warned that unless immediate action is taken to tackle Britain's huge deficit, the country could find itself in the midst of a crisis similar to that of other European countries such as Greece.

Although Mr Laws claimed that "this sort of shockwave through Government departments" is necessary, he went on to say that "we are hoping that we will be using a scalpel rather than a chainsaw", and explained that £500m of the cuts will be reinvested in further education, apprenticeships and social housing. The Business Department's cut will also be alleviated slightly by an extra £200 million for apprenticeship schemes.

Furthermore, a new board, entitled the Efficiency and Reform Group, is being established to oversee governmental cuts and will be jointly chaired by Mr Laws and Cabinet Minister Francis Maude.

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