News | Published January 30 2020

Javid tells departments they must cut budgets by 5%

In a letter to all government departments, Chancellor of the Exchequer Sajid Javid and Boris Johnson have set hard commitments for each department to make savings which equal five per cent of their total budgets.

Treasury sources have said that these cuts are designed to end poor-value schemes in order to free up money to invest in Boris Johnson’s priorities of funding the NHS, fighting crime and “levelling up” various regions around the country.

In order to make these savings, departments are being asked to highlight ten potential programmes which can be axed ahead of autumn’s Comprehensive Spending Review.

The letter comes after Boris Johnson told his cabinet that it was “time for the slaughtering of sacred cows”, requesting an end to pet projects first established by his predecessors.

In the letter, Mr Johnson and Mr Javid said: “We expect the secretary of state to do a line-by-line audit of their budgets and to identify those areas of spend that are ineffective or represent lowest value of money.”

This move was criticised by Opposition MPs. 

John McDonnell, the shadow chancellor, said the demand showed that austerity was not over, which Mr Javid had claimed in September, and branded the budget reductions “a cuts round dressed up as an efficiency exercise.”

The Treasury responded by arguing that this decision “is not about cuts, it’s about stopping things we are currently doing which aren’t meeting our objectives and ensuring that money is available to spend on our priorities.”

Last year, day-to-day departmental spending came to around £330 billion. 

Of all government departments, health spent the most, with a spend of £139 billion, education the second most, with a spend of £68 billion and defence in third with a total spend of £41 billion.

The demand for a saving of five per cent is likely to equate to more than £15 billion for each department. 

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Authored by

George Salmon
Political Editor
January 30 2020

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