Chancellor George Osborne has unveiled his Comprehensive Spending Review. We'll have full analysis and reaction throughout the day, but here are the key settlements:
- The Foreign and Commonwealth Office's resource budget has been protected in real terms.
- Funding for the Scotland, Wales, and Northern Ireland Offices protected in real terms.
- There will be real-terms protection for police funding.
- The Home Office overall resource budget is down by 4.8%, but within this the administration budget will fall by 30%. There will be resource savings of 5% found though creating a “fully funded borders and immigration system”.
- The Ministry of Justice will see a 15% cut by 2019-20, with its administrative budget falling by 50% over the same period. Other savings will come from "efficiencies within the prisons and courts systems".
- The Department for Communities and Local Government budget will be cut by 29%, but within this the DEL allocated to local government will fall by 56%. This is to be offset by other changes to local funding, so that the overall funding to local authorities is predicted to fall by just 6.7%. There will be a 20% reduction in the department's paybill by 2019-20
- The Department for Work and Pensions resource budget has been cut by 14%, with the chancellor saying some of the savings will come from "co-locating" job centres. Better-than-expected public finance figures have allowed Osborne to abandon his planned cuts to working tax credits – without touching the taper rate for Universal Credit. DWP's settlement also includes "investment" which will allow it to become a "smaller, more efficient" department, spending 22% less on administration, 34% less on technology (both in real terms) and occupying 20% less estate.
- The Department for Business, Innovation and Skills will see its resource budget cut by 17%. Science and adult skills budgets will be protected, and the department will cut its administration budget by £100m by 2019-20. To do this there will be a wide "programme of reform" including ALB reform and estates and workplace reform.
- The Department for Energy and Climate Change will see its resource spending cut by 22%.
- There will be a 15% cut in day-to-day spending at the Department for Environment, Food and Rural Affairs.
- The Department for Culture, Media and Sport sees a 20% cut to its resource spending – but more cash allocated to the Arts Council and free museum entry protected.
- The Department of Health will see 25% cuts to its resource spending.
- The Department for Transport's resource budget will fall by 37%, but there is a boost to capital spending. "Substantial" savings to be made through continued reform in the department and its ALBs, including £94m from digitisation work in the DVLA.
- The Treasury will see its resource budget cut by 26%.
- HM Revenue & Customs total resource budget will fall by 18% with significant estates reform taking them from 170 local offices to 13 regional centres.
- The core Cabinet Office budget takes resource cuts of 24% – but there's a £450m funding boost for the Government Digital Service as well as boosts for security funding so the overall Cabinet Office budget rises by 4.4%
The bigger picture
- There will be a total of £21.5bn in resource spending cuts from unprotected departments by 2019-20 – but £9.5bn will be reinvested, meaning an overall consolidation of £12bn over the perdiod.
- Across all unprotected Whitehall departments, the cumulative real rate of reductions over the Spending Review period is 19%.
- Overall resource departmental expenditure will fall by 0.8% a year on average in real terms, the Treasury says.
- The Treasury says the average rate of reduction in the last parliament was 2.0%, meaning the next round of cuts is less steep than those experienced during the previous five years – although allocating those cuts will undoubtedly be more difficult given the efficiencies already delivered.
More on Spending Review 2015: Key workforce, estate and financial management reforms – and the assets in line for privatisation
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CSW, in partnership with KPMG, will host a webinar to discuss the implications of the Spending Review on 10 December. Click here for more information.