Departments face further cuts to fund infrastructure investment

Most central government departments will have to cut spending by two per cent over the next two years in order to fund a £2.5bn investment in infrastructure, it has been reported.

Paul Heartfield

By Suzannah.Brecknell

19 Mar 2013

Chancellor George Osborne told colleagues about the cuts, to be formally announced in tomorrow's budget, at a Cabinet meeting yesterday. The health and education departments will not face cuts, and certain spending areas will also be protected.

HM Revenue & Customs’ budget will not be cut in either year, while police and local government grants will not be cut in 2013-14.

The Ministry of Defence is to be given special dispensation to carry forward unspent cash worth £1.6bn over the next two years.

The overseas aid budget will remain ring-fenced, though it will be adjusted downwards if Britain’s  gross national income shrinks.

All other departments will  be expected to cut spending by one per cent in 2013-14 and 2013-15. This comes on top of three per cent spending reductions announced for the same period in last year’s Autumn Statement.

A spokesperson for the Prime Minister said: "The forecasts that are going to be published at the budget will show that departments are underspending their budgets more than the historical average, reflecting the work the government has done across all budgets to bring spending under control. The chancellor and chief secretary have decided to take account of this and reduce departmental budgets in future years."

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