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Government departments agree 30% cuts

Words: Laura Edgar

The Department for Communities and Local Government has agreed to cut 30 per cent from its budget over the next four years after reaching a provisional comprehensive spending review deal with chancellor George Osborne.

In a speech at London’s Imperial College today, Osborne announced the deal, which was also agreed with the Departments for Transport, Environment, Food and Rural Affairs and the Treasury itself.

This follows an announcement in July that government departments faced cuts of up to 40 per cent.

Osborne said the cuts, to be finalised in the spending review on 25 November, would be 30 per cent on average in total over the next four years.

“These savings will be achieved by a combination of further efficiencies in departments, closing low-value programmes, and focusing on our priorities as a country.

“These provisional settlements apply to the day-to-day resource spending of the central departments - they are not the capital budgets of these departments,” he said.

The Campaign for Better Transport has expressed concerns that everyday transport would be affected by the cuts.

Executive chairman Stephen Joseph said: “We fear that this huge cut in spending will hit everyday transport, the transport networks people use on a daily basis, whilst big road and rail schemes will remain untouched. We await details, but we fear this will mean more potholes in local roads, more cuts in local bus services, and less funding for safe cycling and walking routes.”

Joseph said that to protect public transport, Campaign for Better Transport would like to see buses get the funding they need by investing in a ‘Transport into Work’ fund.

“This would help overcome the transport barriers to employment and would replace the successful Local Sustainable Transport Fund. We’re also calling on the government to use its rail franchise premium income to make good on their promises for fairer fares and flexible ticketing for part-time workers,” he concluded.

Lord Porter, Chairman of the Local Government Association, said: "The announcement on departmental spending settlements covers DCLG's own budget and not local government funding. We hope this is an early indication that DCLG is leading by example by looking at ways to absorb some of the funding cuts it will need to make as part of the Spending Review rather than passing them onto local government. We would encourage other Whitehall departments to follow suit.”

Porter said that a reduction similar in size to core council funding would leave councils facing £16.5 billion in funding reductions, increasing cost pressures by 2020.

"Government needs to consider the pressure funding reductions to councils would have not just on vital local services but on the public sector more widely.

“We need to find a new way of working that ensures public money is controlled by local areas who know how best to spend it. This will not only help us improve services but also help achieve shared local and central government ambitions to boost housebuilding, close skills gaps and grow local economies and relieve pressure on the exchequer," Porter added.

During his speech, the chancellor also announced that prison reform would form part of the spending review.

He said the government would start to close some of the “outdated” prisons in city centres, and sell the sites for up to 3,000 new homes. Nine new prisons would be built to replace those that are lost. Five, Osborne said, “will be completed by 2019-20, the rest soon after”.

He said the new prisons would save the government £80 million in running costs.

The full details of the cuts and prison reforms will be announced in the spending review.