Osborne's spending cuts loom

Sunday, 23 May 2010 11:00 AM

By Alex Stevenson

Quangoes and the Department for Business, Innovation and Skills are expected to bear the brunt of the spending cuts set to be announced.

Chancellor George Osborne will outline how the government will achieve £6 billion of cuts in the current 2010/11 financial year on Monday.

Deputy prime minister and Liberal Democrat leader Nick Clegg defended the measures. During the general election campaign he had argued £6 billion of cuts went too far but today claimed the international economic picture - particularly in the eurozone - had changed his judgement.

"I don't think we anticipated quite how sharply the economic conditions in the eurozone would have deteriorated and the need to show you're going to get to grips with this suddenly became much better. There was a less volatile economic environment," he said on The Andrew Marr Show.

"We need to show at a more accelerated timetable than I'd initially thought that we're going to get to grips with this great big black hole in our public finances."

David Cameron's previous promise to hold a "bonfire of the quangoes" when the Conservatives entered power could be met as bodies including the Sustainable Development Commission, the National Police Improvement Agency and the Milk Development Council could face cutbacks.

Others, like the national curriculum-supervising Qualifications and Curriculum Development Agency, are expected to be axed altogether as savings worth over £500 million are sought.

"We are moving from an age of plenty to an age of austerity in the public finances," Liberal Democrat chief secretary to the Treasury David Laws told the Financial Times in an interview yesterday.

He said an "aggressive" series of cuts was needed to tackle Britain's £156 billion deficit in the public finances and added: "I'm mentally prepared for getting a lot of representations from angry people about reductions in budgets."

Public sector unions are likely to be among those angry with the Treasury. The Sunday Times newspaper reported that at least 300,000 jobs were likely to be culled.

Mr Osborne is also expected to announce cutbacks to civil service perks, cutting spending on consultancies and reducing communications and advertising budgets.

"These are difficult decisions. No one, myself included, went into politics to deliver cuts. But we all know it's going to be difficult - and it's going to be controversial," Mr Clegg acknowledged.

"The basis on which to judge the success of this coalition is to see after five years whether Britain is fairer... and a new approach to the economy. That will take time."

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• economy
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• economy and finance
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• taxation