30 June 2013

UK: New plan to reduce spending in 2015-2016

In 2010, the UK Government inherited the largest deficit since the Second World War and one pound in every four that the UK Government spent was borrowed. Thanks to the tough choices taken since then, progress is already being made: the economy is growing, more than a  million new jobs have been created by British businesses, and the amount the Government has to borrow each year – the deficit – is down by one third.

The Government’s economic plan has three parts: keeping mortgage rates low for families and fixing the banks to support investment in business; dealing with the country’s debts to maintain confidence in the UK’s ability to pay its way; and long-term economic reform to back aspiration and equip Britain to win the global race. The Spending Round sets out how the UK Government will continue to reduce the deficit by taking difficult decisions to cut public spending and prioritise investment in infrastructure to deliver a stronger economy and fairer society.

The UK Government has proved that there does not have to be a choice between excellent public services and public services that the UK can afford. Because spending reductions since 2010  have been accompanied by reforms to how services are delivered, crime is a 30 years, school standards have risen and employment is at record levels.

The Spending Round provides an opportunity to make new choices about how to prioritise spending over the rest of the Parliament in line with the UK Government’s economic plan. The UK Government will reduce current spending by £11.5 billion in 2015-16, allowing it to increase capital spending plans by £3 billion a year from 2015-16 and by £18 billion over the next Parliament. This will boost investment in infrastructure to support economic growth at the same time as ensuring a sustained reduction in the deficit. Without the £3.6 billion savings from the welfare budget in 2015-16 that were announced at Autumn Statement 2012, reductions in departmental spending would have been commensurately higher. The UK Government will protect spending on health, schools and overseas development – maintaining the vital public services that everyone relies on at home, and supporting the poorest overseas.

The Spending Round sets out a series of investment decisions and reforms that demonstrate how the Government is prioritising growth, transforming public service delivery, controlling welfare spending, driving out efficiency savings and ensuring fairness in its plans for spending in 2015-16.

Full document

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