Osborne sets out departmental budget cuts


Chancellor George Osborne has unveiled where £11.5bn of Whitehall cuts will be made in 2015-16, as he set out his Spending Review in the Commons on 26 June 2013.

Mr Osborne told MPs it was difficult to make cuts but insisted the government must stick to its economic strategy in order to balance the nation's books.

"We have to deal with the world as it is, not as we would wish it to be," he said.

Labour said it was "more of the same" from a "failing" chancellor who should be trying to kick start growth now rather than planning for cuts ahead.

Mr Osborne said borrowing was £49bn lower this year than Labour had planned and that government spending will be £745bn in 2015-16.

He told MPs the spending round had been guided by three principles: reform, growth and fairness.

Automatic pay progression in the public sector will be scrapped and a new cap on welfare spending - excluding state pensions - will be implemented from April 2015.

There will be a new seven day wait for people before people can claim their benefits while non-English speakers will be required to take English classes in order to sign on.

Schools spending will be protected in real-terms funding and there will be a 1% real-terms increase in military equipment budget, with no further cuts to military personnel.

Government departments facing the biggest cuts, of 10%, include the Treasury, Cabinet Office, Justice and the Department for Communities and Local Government and the Department for Environment, Food and Rural Affairs.

Responding to the statement, shadow chancellor Ed Balls said families and business are paying the price for Mr Osborne's "comprehensive failure" on living standards, growth and the deficit.

"It doesn't have to be this way," Mr Balls said. "Instead of planning cuts in 2015, two years ahead, surely the chancellor should be taking bold action now to boost growth this year and next. Investment which would get our economy growing."

The shadow chancellor said it will be up to a future Labour government to turn the economy around and get the deficit down.

Replying, Mr Osborne said Labour's policy was to borrow more and claimed the economic argument advanced by the shadow chancellor over the past three years has "completely collapsed".

In-depth BBC coverage of the Spending Review can be found here.

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