Cost cuts and quango culls

Chancellor of the Exchequer George Osborne has announced plans for cutting £6.2bn from the UK’s deficit – spelling out measures for ‘efficiency gains’ across all government departments and the abolition of certain quangos. 

This is the coalition government’s first move to tackle the UK’s deficit, which reached £159.2bn last year according to the Office for National Statistics. The department reported this was equivalent to 11.4 per cent of the country’s gross domestic product (GDP).

When announcing the creation of an independent Office for Budget Responsibility (OBR) last week Osborne warned that failure to tackle the UK’s record deficit would be ’disastrous’. He said these savings were achievable without affecting frontline public services and will be an immediate down payment towards reducing the deficit.

Osborne devised plans for efficiency gains with his Liberal Democrat colleague the Chief Secretary to the Treasury, David Laws. The secretary stood with the chancellor today as he announced these measures will likely take the form of budget cuts for IT, consultancy, advertising and a civil servant recruitment freeze.

The predicted £6.2bn savings includes cuts across nearly all departments including £836m from Business, £683m from Transport and £670m from Education.

Laws said the savings figure do not take into account the departments of Health, International Development and Defence, which will need to make their own separate budgeting decisions.

Osborne and Laws see nearly £600m being saved by slashing costs from quangos or possibly abolishing some. While there is still speculation as to which quango will be sent to the chopping block, Laws did confirm major cuts will be made to the Train to Gain scheme as it was considered to have low value for money.