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Comprehensive Spending Review: an outline summary

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Spending reviews have been part of the governmental landscape since the late 1990s, but none have garnered quite the anticipation of the one which the Coalition government has just delivered.

What follows is an outline summary of the main points:

  • Chancellor announces four-year public expenditure plan.

Debt and spending

  • Current debt interest payments total £43 billion a year. Debt interest payments will be lower by £1 billion in 2012, £1.8 billion in 2013 and £3 billion in 2014, a total of £5 billion over the course of the Spending Review.
  • Next year, expenditure will be £651 billion, rising to £693 billion by 2014/15.

Departmental cuts

  • Government departmental cuts to average 19 per cent.
  • Whitehall administrative costs to be cut by £6 billion.
  • The core Cabinet Office budget will be reduced by £55 million by 2014/15.
  • Treasury budget to fall by 33 per cent.
  • MOD spending to fall by 8 per cent to £33.5 biliion in 2014/15.
  • Foreign Office to lose 24 per cent of Budget by 2014/15.
  • Home Office budget to be cut by 6 per cent.
  • Department of Business to reduce spending by 7.1 per cent.
  • Ministry of Justice budget to be cut by 6 per cent per year down from £9.5 billion to £7 billion over four years.
  • Funding for the Department for Energy and Climate Change will fall by an average 5 per cemt a year and the Department for the Environment, Food and Rural Affairs must save an average of 8 per cent a year.

Effects of the cuts

  • OBR predicts reduction headcount of 490,000 in public sector over next four years.


  • State pension age to rise to 66 for men and women by 2020, four years ahead of the previous plan. It will start to rise from 65 to 66 from 2018.
  • Public sector pensions to save an additional £1.8 billion by 2014/15.
  • Savings credit for pensioners to be frozen for four years.


  • The Department for Work and Pensions must find savings from the £200 billion benefit bill on top of those identified in the Budget.
  • New universal credit to replace benefits and tax credits over the course of the next two Parliaments.
  • Removal of child benefit from higher earners confirmed.
  • Child benefit to stay for children until they leave school.
  • Further increases in child element of Child Tax Credit.

Health and education

  • Total health spending to rise over inflation to be funded in part by welfare cuts.
  • Real increase in schools budget, from £35 billion to £39 billion over the span of the Parliament.
  • New £2.5 billion pupil premium for children from poorer backgrounds.
  • Sure Start to be protected in cash terms.
  • Educational maintainance allowance for 16-19 year olds to be dropped.

Training and skills

  • Increase of 50 per cent in apprenticeship funding over the next four years, covering 75,000 extra places.
  • Train to Gain scheme to be dropped.
  • No graduate tax.
  • Science budget to be safeguarded at £4.6 billion a year.

Transport and environment

  • Transport projects to see investment of £30 billion over the next four years.
  • A “green” investment bank will be set up using £1 billion of funding.

Other announcements

  • Ringfencing of local authority revenue grants to end by April 2011.
  • Council funding to drop by 7.1 per cent over four years.
  • Police spending to fall 4 per cent each year.
  • Legislation to introduce a permanent tax levy on banks will be published on 21 October.
  • Extra £900 million to be spent by HMRC on tackling tax fraud, the aim to reclaim £7 billion in revenues.