GEORGE Osborne yesterday announced that he will hold a spending review on 26 June, where he is expected to detail further cuts to Whitehall budgets.
The chancellor told MPs that the overall “spending envelope” will be set in next week’s Budget.
The announcement will set off months of lobbying by ministers who are desperate to avoid departments such as the home office, transport, and welfare bearing the brunt of future cuts.
Earlier this week business secretary Vince Cable, former Tory cabinet minister Liam Fox, and the independent think tank Reform attacked the government’s decision to ringfence the health, schools and aid budgets on the basis that it restricts flexibility.
Together those budgets account for two-fifths of government spending.
The last spending review, held shortly after the 2010 general election, saw the government set out substantial cuts to departmental budgets up to the end of the 2014-15 fiscal year, including a planned £1.7bn saving through delaying or stopping government contracts and projects, and cuts at the Department for Business, Innovation and Skills totalling £836m.
This year’s review will include budgets for 2015-16 – after the next general election.
Shadow chancellor Ed Balls labelled the event as “a spending review David Cameron and George Osborne never wanted or expected to happen”.