Spending Review 2015: The departmental settlements

Written by Matt Foster and Suzannah Brecknell on 25 November 2015 in News
News

Topline departmental figures from the chancellor's Comprehensive Spending Review

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
DWP to cut estate by 20% as government eyes £4.5bn savings
George Osborne unveils surprise boost for Government Digital Service

100,000 public sector jobs will go by 2020, OBR predicts

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.

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Matt Foster and Suzannah Brecknell
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