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22/07/2015

DCLG and DfT face 40% spending cuts

Words: Laura Edgar

Chancellor George Osborne has launched his spending review, with Whitehall departments including the Department for Communities and Local Government having to bear spending cuts of up to 40 per cent.

Government departments that are not protected, including the Departments for Communities and Local Government, Transport, Energy and Climate Change, and Environment, Food and Rural Affairs, are expected to find £3 billion in savings in the current financial year.

Set to be published on 25 November 2015, the review will set out, according to the government, how it will invest in “priority public services” and “deliver £20 billion further savings required to eliminate Britain’s deficit by 2019/2020”.

Departments have also been asked to help meet the target of building 150,000 new homes on public sector land by 2020.

Osborne has asked secretaries of state to consider what can be devolved in their respective departments to local areas. City regions that want to agree a devolution deal in return for an elected mayor, the Spending Review 2015 (PDF) states, need to “submit formal, fiscally neutral proposals and an agreed geography to the Treasury by 4 September”.

Although the NHS and national security will be invested in, Osborne said government departments will have to find “significant savings through efficiencies”.

The government will, he said, “deliver more with less”.

Gary Porter, chairman of the Local Government Association, said councils have already made £20 billion in savings since 2010 after government funding was reduced by 40 per cent.

"A 25 per cent real-terms reduction to the local government finance settlement would mean a decrease of £4 billion by 2020 while a 40 per cent reduction would mean this rises to £7 billion,” said Porter.

"If our public services are to survive the next few years, we urgently need a radical shift in how public money is raised and spent, combined with proper devolution of decision-making over transport, housing, skills and social care to local areas.”

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