Justice dept to slash £2bn from budget

THE SCALE of the cuts to hit the public sector were exposed yesterday after the Ministry of Justice (MoJ) said it was planning to slash £2bn from its £9bn annual budget, leading to tens of thousands of job cuts and far fewer prison places.

Ann Beasley, the MoJ’s director-general of finance, wrote to senior civil servants yesterday morning to announce the savings, warning that the majority of savings would need to be made within the next two years.

The letter, which was leaked to the press through the Public and Commercial Services (PCS) union, provides one of the first insights into the wrangling between Whitehall departments and the Treasury, as the government gears up for the fiercest fiscal tightening in Britain’s peacetime history.

It confirms that Clarke held a “bilateral” meeting with chief secretary Danny Alexander to thrash out the details of his spending settlement.

Beasley’s warning that the savings will likely be made within the next 12 to 24 months proves the government is serious about “front loading” the cuts. Coalition sources say this would repair the public finances more quickly, allowing the government to reduce taxes in the run up to an election planned for May 2015.

The letter also suggests justice secretary Ken Clarke has agreed a 25 per cent reduction in departmental spending with the Treasury.

Departments were asked to model 25 per cent and 40 per cent savings, but Clarke is said to have refused to prepare for the “doomsday” scenario, insisting that cuts of that magnitude were simply untenable. Over £4bn of the department’s budget is spent on running prisons and paying legal aid, meaning both areas will be severely squeezed. The PCS said it would be impossible to deliver the savings without cutting 15,000 jobs, and closing prisons and courts.