DCLG and Defra agree to 30 per cent cuts
The Department for Environment, Food & Rural Affairs (Defra) and the Department for Communities and Local Government (DCLG) are among the four departments to have agreed the cuts, which the government claims are needed to bring public finances back into surplus by 2019/20.
The Department of Transport and the Treasury itself are also part of the group of departments that will have their day-to-day budgets, excluding capital expenditure, cut by an average of eight per cent each year for the next four years. Although no specific figures have yet been revealed, the four departments will have their total budgets cut by an average of 30 per cent.
Osborne was speaking today at Imperial College, London and confirmed that the cuts would be included in the 25 November spending review.
The four departments are the first to agree cuts as the government seeks a total of £20 billion of reductions in departmental spending.
Osborne said that savings will be made by a ‘combination of further efficiencies in departments, closing low-value programmes and focusing on our priorities as a country’.
As part of the settlement, Environment Secretary Liz Truss, as well as Transport Secretary Patrick McLoughlin and Communities Secretary Greg Clark, will be allowed to join the government’s public expenditure committee as it seeks to impose cuts on departments that have so far held out from an agreement.
Public finances essential for reigniting security
In his speech Osborne said: “There is no economic security, there is no national security, there is no opportunity, when you lose control of the public finances.
“It is only when you control spending, and live within your means, that you can build a country with security and opportunity at its heart. And that’s what the spending review I will present will be all about.”
Shadow Chancellor John McDonnell responded to the announcement by saying that investment in the green economy would be a better way of creating a more prosperous economy.
He said: “The real test for the Tories’ spending review is whether it makes working people better off and ensuring a more balanced, prosperous economy which works for everybody.
“Labour would close the deficit by investing in a growing productive economy, not with cuts and austerity that damage public services and growth.
“That means reversing the tax credit cuts which will destroy economic security for millions of working families, and investing now to grow the economy, with a focus on science, technology and green jobs to equip Britain for the future.”
Cuts ‘should not be at the expense of the environment’
Previous budget cuts at Defra, which will total £800 million by the end of 2015/16 and have been amongst the largest in government, despite Defra being one of the smallest departments, have been criticised by industry and the government’s own Environment, Food an Rural Affairs (EFRA) Committee.
Indeed, in 2014, EFRA voiced concern that ongoing budget cuts to Defra would impact on the department’s ability to deliver its work, and that the prospect of further cuts was having a negative impact on staff morale within the department.
The cuts within the department have also been cited as one of the main reasons the Waste & Resources Action Programme (WRAP) registered as a charity in 2014, having lost the majority of the budget it received from the department, which had previously supplied around half of its funding.
Few industry representatives have yet commented on the latest announcement of cuts, but Environmental Services Association (ESA) Executive Director, Jacob Hayler urged the government to follow through with its commitment to tackle waste crime.
He said: “While ESA members fully accept the need for cuts in public spending, these should not be at the expense of the environment or local communities.
“Tackling waste crime actually saves taxpayers’ money, by minimising tax evasion and reducing the costs local authorities incur cleaning up blighted areas.
“We urge the Chancellor to ensure that Defra, local authorities and regulators continue to have sufficient front-line resources to deter waste crime and to deal with it effectively when it occurs.”