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    Spending review 2010 – main points

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    Further Reading


    • Age UK - spending review briefing

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    20th October 2010

    Chancellor George Osborne has delivered the government's four-year spending review to Parliament.Here are some key announcements by department:

    Home Office

    The Home Office budget will find savings of an average of 6 per cent a year.

    Police spending will fall by 4 per cent each year of the spending settlement, with the aim of avoiding any reduction in the visibility and availability of police in our streets.

    Ministry of Defence

    The chancellor confirmed the Ministry of Defence budget will reach £33.5bn in 2014/15, a saving of 8 per cent.

    Ministry of Justice

    The Ministry of Justice's budget is to reach £7bn by the end of the four year period, with average savings of 6 per cent a year.

    Chancellor's departments

    HM Revenue and Customs' budget will be expected to find resource savings of 15 per cent through the better use of new technology and greater efficiency, while spending £900m more on targeting tax evasion and fraud to help collect a missing £7bn in tax revenues.

    Department for Business, Innovation and Skills

    Total Department for Business, Innovation and Skills budget to fall from £20.1bn in 2010/11 to £16bn in 2014/15.

    The science budget will be protected with no cash cut, leaving it at £4.6bn a year.

    Department for International Development

    Total Department for International Development budget to rise from £7.9bn in 2010/11 to £11.6bn in 2014/15.

    Total Overseas Development Aid budget to rise from £8.4bn in 2010/11 to £12.6bn in 2014/15.

    Foreign and Commonwealth Office

    Total Foreign and Commonwealth Office budget to fall from £1.6bn in 2010/11 to £1.3bn in 2014/15.

    Sharp reduction in the number of Whitehall-based diplomats and back office functions.

    There will be a focus on helping British companies win exports and secure jobs at home, and with the help of the UKTI the government will seek to attract significant overseas investment.

    Department for Work and Pensions

    Total Department for Work and Pensions budget to rise from £158.6bn in 2010/11 to £171.5bn in 2014/15.

    The state pension age will rise to 66 by 2020 for both men and women. The measures combined will save £5bn a year.

    Winter fuel allowance, free bus passes and TV licences for 75-year-olds protected.

    Cuts to child benefit for higher rate taxpayers to generate £2.5bn. £2bn investment in new universal credit. Weekly child element on child tax credit to rise by £30 in 2012 and £50 by 2012.

    Department for Culture, Media and Sport

    Total Department for Culture, Media and Sport budget to fall from £7.1bn in 2010/11 to £6.8bn in 2014/15.

    Administration costs will be reduced by 41 per cent, including the abolition of 19 quangos.

    Free entry to museums and galleries will remain. Osborne also confirmed the terms of the deal with the BBC over the licence fee. It will be frozen for the next six years, with the Corporation taking on responsibility for funding the World Service, BBC Monitoring and S4C.

    Total Olympics budget to fall from £2bn in 2010/11 to negative £0.2bn in 2014/15.

    Law Officers' Departments

    Total Law Officers budget to fall from £0.7bn in 2010/11 to £0.6bn in 2014/15.

    Reforms will also be required to streamline the criminal justice system, close under-used courts and reduce the legal aid bill.

    Department for Environment Food and Rural Affairs

    Total Department Environment, Food and Rural Affairs budget to fall from £3bn in 2010/11 to £2.3bn in 2014/15.

    Fund improvements in flood defences and coastal erosion management, that will aim to provide better protection for 145,000 homes.

    Department of Energy and Climate Change

    – Total Department of Energy and Climate Change budget to rise from £2.9bn in 2010/11 to £3.6bn in 2014/15.

    Department for Transport

    Total Department for Transport budget to fall from £13.1bn in 2010/11 to £12.3 6bn in 2014/15.

    £30bn to be invested in transport projects over the next four years, including £14bn to fund maintenance and investment in railways.

    The cap on regulated rail fares will rise to RPI plus 3 per cent for the three years from 2012, to help pay for new rolling stock and improve passenger conditions.

    Cabinet Office

    The core budget will be reduced by £55m by 2014/15 and part of the Cabinet Office will move into the Treasury's Whitehall offices.

    Civil List cash funding for Royal Household will fall by 14 per cent in 2012/13, while grants to the Household will be frozen in cash terms with a temporary additional facility of £1m to support the costs of the Diamond Jubilee. New system of funding for Royal Household from 2013.

    Department of Health

    Total Department of Health budget to rise from £101.8bn in 2010/11 to £114.6bn in 2014/15

    Devolved Administrations

    The devolved budgets for Scotland, Wales and Northern Ireland will all rise, although below the rate of inflation. Scotland's budget will rise to £25.4bn in 2014/15, Wales to £13.5bn and Northern Ireland to £9.5bn.

    The Northern Ireland Executive will receive £25m in cash and a £175m loan to help those affected by the collapse of the Presbyterian Mutual Society.

    Department for Communities and Local Government

    Total Department for Communities and Local Government budget to fall from £38.6bn in 2010/11 to £27.3bn in 2014/15.

    Local Authority revenue grants will no longer be ring fenced.

    Aim to build 150,000 new affordable homes over next four years.

    Department for Education

    Total Department for Education budget to rise from £60.6bn in 2010/11 to £61.4bn in 2014/15.

    The schools budget will rise from £35bn to £39bn and the government will introduce the Liberal Democrat's £2.5bn pupil premium.

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    Article Comments

    Ring-fenced public health funding shows the government's commitment to protecting our nation's health and an understanding that investing in public health, such as obesity prevention and treatment, will reap financial rewards.

    We look forward to the publication of the Public Health White Paper later this year, where we will find out more about how this money will be spent.

    Harry MacMillan, chief executive, MEND
    20th Oct 2010 at 5:23 pm

    The Chancellor states that high quality transport links are essential to underpin a successful economy and the Spending Review prioritises capital spending on transport infrastructure projects which can offer high economic returns. How bizarre that the same Government has vetoed plans to permit any new runway at Heathrow or any other London Airport that would have been funded almost entirely by the industry rather than the taxpayer and would have yielded over 30bn pounds of economic benefit to UK plc.

    Simon Buck, chief executive, British Air Transport Association
    20th Oct 2010 at 4:56 pm

    These short-termist cuts will cause further damage to already fragile rural economies.

    Research tells us that around £7.3bn was spent on visits to the Countryside last year, a figure which could drop dramatically if popular walking destinations fall into disrepair.

    The Ramblers
    20th Oct 2010 at 4:31 pm

    The Government is right to recognise the importance of continued investment in flood defences. But we are disappointed that this will not be maintained at current levels, given the scale of the problem and the wider economic benefits provided by flood defences to our communities and businesses.

    Nick Starling, Director of General Insurance and Health, Association of British Insurers
    20th Oct 2010 at 4:24 pm

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    Article Comments

    Ring-fenced public health funding shows the government's commitment to protecting our nation's health and an understanding that investing in public health, such as obesity prevention and treatment, will reap financial rewards.

    We look forward to the publication of the Public Health White Paper later this year, where we will find out more about how this money will be spent.

    Harry MacMillan, chief executive, MEND
    20th Oct 2010 at 5:23 pm

    The Chancellor states that high quality transport links are essential to underpin a successful economy and the Spending Review prioritises capital spending on transport infrastructure projects which can offer high economic returns. How bizarre that the same Government has vetoed plans to permit any new runway at Heathrow or any other London Airport that would have been funded almost entirely by the industry rather than the taxpayer and would have yielded over 30bn pounds of economic benefit to UK plc.

    Simon Buck, chief executive, British Air Transport Association
    20th Oct 2010 at 4:56 pm

    These short-termist cuts will cause further damage to already fragile rural economies.

    Research tells us that around £7.3bn was spent on visits to the Countryside last year, a figure which could drop dramatically if popular walking destinations fall into disrepair.

    The Ramblers
    20th Oct 2010 at 4:31 pm

    The Government is right to recognise the importance of continued investment in flood defences. But we are disappointed that this will not be maintained at current levels, given the scale of the problem and the wider economic benefits provided by flood defences to our communities and businesses.

    Nick Starling, Director of General Insurance and Health, Association of British Insurers
    20th Oct 2010 at 4:24 pm

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