Government spending review: How George Osborne's 40 per cent cuts would shrink each department

 
Billy Ehrenberg
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The department that would save the Treasury the most would be Work and Pensions, where 40 per cent cuts would net £68.2bn (Source: Getty)

George Osborne’s spending review will have struck fear into many a government department.

The chancellor has committed to cutting £20bn from the public purse and, as well as kicking off a major land-grab of from public property in an attempt to address Britain's housing supply crisis, he's tasked each department to come up with projections for the impact of both 40 per cent and 25 per cent cuts to their budgets, if such cuts were imposed.

The NHS, defence, and per-pupil schools budgets will be safe from the executioner's axe, as outlined in the July Budget.

But for the rest of government, cuts that big will go unnoticed. Indeed, they'll be so large, they could change the face of public services all together.

Here's how it would look if each department was cut equally.

The data for the visualisation is based on 40 per cent and 25 per cent reductions in the full spend for the 2013/14 financial year, so actual calculations are likely to differ.

The department that would save the Treasury the most would be Work and Pensions, where 40 per cent cuts would net £68.2bn, while 25 per cent cuts would bring in £42.6bn.

In the 2013/14 financial year, public sector spending was £673bn, according to cabinet office data, and a 40 per cent saving would have been £269bn. Even 25 per cent would be far greater than the 20 per cent already pledged – it would have come out at £168.2bn.

To get government finances into surplus, Osborne has already outlined plans to slash welfare spending by £12bn, save £5bn with new tax avoidance prevention, and trim £20bn from spending.

The 40 per cent theoretical cuts are far from set in stone. Rather than the budget reductions being definite, these are merely calculations to gauge what affect the cuts would have, if implemented. As foreign secretary Phillip Hammond said, they are a “ranging shot”, testing the water.

Past experience would suggest that initial pitching by the Treasury should be regarded as aspirational. But it is clear that to deliver the overall fiscal trajectory departments collectively will have to make substantial savings, double-digit percentage savings.

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