The UK Treasury has written to departments advising them to plan for a further round of funding reductions ahead of next year’s Spending Review, in a further display of the Chancellor’s determination to continue with austerity, come what may.
According to a report in The Times, the first request for details of departmental spending plans was sent to departments last week, when Chief Secretary to the Treasury Liz Truss MP called for departments whose budgets have not been protected to work with the Finance Ministry this summer to identify potential savings.
The letter does not contain a target for reductions, but it is believed that some departments are expected to find 5% of savings.
Chancellor Phillip Hammond MP has previously warned UK Government departments that the proposed £20,000 million boost for the NHS over five years will ‘leave no extra money’ to spend on their own policy areas, while Ms Truss has told departments they should ‘rein in their spending demands’ as there will be little money to boost budgets in the 2019 review.
The full review of departmental spending, announced by Mr Hammond in March, will follow the publication of the overall spending envelope later this year.
One Minister told The Times:
“Philip Hammond has got Theresa May to agree to no more borrowing [above the fiscal rules] so that means it looks like cuts to pay for the extra money for the NHS. But the answer is to raise taxes to protect spending.”
Kenneth Gibson MSP commented:
“This is another example of how the Tories blindly use austerity as the answer to everything.
“A Financial Times poll this spring revealed that an overwhelming majority of voters (66%) across the UK now feels that cuts to public services have gone too far, but as usual the Tories would rather take from those who are vulnerable than raise taxes for those who can most afford it, such as those who evade taxes altogether.
“As for the supposed NHS boost, the Tories have made it clear that they will pay for it only by ‘robbing Peter to pay Paul,’ with UK Government departments and the Scottish Budget under continuing pressure. In the current year we suffered a £211 million real terms cut and next year Scotland’s block grant will be cut by a further £337 million. A decade of austerity has been imposed on Scotland, from Labour in 2009 through until next year and beyond under the Tories.
“Economic growth, not further austerity is the way to build prosperity.”