Chancellor announces billions in cuts

Chancellor announces billions in cuts

Chancellor George Osborne has revealed £4.5bn of measures he plans to enact to bring down national debt…

A new raft of austerity measures have been released by the Chancellor George Osborne today. It is hoped these cuts will enable the government to reduce national debt, but the news will undoubtedly be of concern to public services.

One of the major revelations is the plan to sell the government’s remaining shares in Royal Mail, which will complete the privatisation of the postal service. The government currently has a 30 per cent stake in the company worth around £1.5bn. The remaining of 70 per cent shares are held by a combination of employees and private investors.

Privatisation was started with an Initial Public Offering of shares in October 2013. The Department for Business, Innovation and Skills (BIS) will start to sell its shares this year. Rothschild has been appointed by BIS to advise on the transaction.

The Chancellor also announced he had identified further asset sales, underspends, and efficiencies during the in-year budget review process.

Last month, Whitehall departments outside of protected areas such as the NHS, schools, and aid were asked to identify areas where money could be saved. As a result a further £3bn savings have been located this financial year. This amounts to around three per cent of unprotected departmental spending this year.

Savings for 2015-16 include measures such as managing department budgets to deliver underspends; driving efficiency savings in Whitehall departments; and selling assets the government does not need to keep hold of. This last point will see Royal Mail sold, as well as the land around King’s Cross. This is valued by the Department for Transport at £245m.

Chancellor George Osborne said: “I am today announcing that the government will begin selling the remaining 30 per cent shareholding we have in the Royal Mail.

“It is the right thing to do for the Royal Mail, the businesses and families who depend on it – and crucially for the taxpayer.

“Further savings in departments this year – and selling our stake in the Royal Mail.

“Getting on with what we promised.

“Reducing the deficit – that is how you deliver lasting economic security for working people.

“For as everyone knows, when it comes to living within your means, the sooner you start the smoother the ride.”

Savings will total £3.066bn (excluding planned Royal Mail sales)and are broken down by department as follows:

Education non schools – £450m

Department for Health non NHS – £200m

Transport incl. King’s Cross property – £545m

CLG Communities – £230m

Business, Innovation and Skills – £450m

Home Office – £30m

Justice – £249m

Defence – £500m

Foreign and Commonwealth Office – £20m

Energy and Climate Change – £70m

Environment, Food and Rural Affairs – £83m

Culture, Media and Sport – £30m

Work and Pensions – £105m

HM Revenue and Customs – £80m

HM Treasury – £7m

Cabinet Office – £17m

Defence has taken the brunt of the cuts, at £500m, with Education and BIS coming in just behind this. The Treasury will only make £7m of cuts, the least of all departments.

How these cuts will translate on the ground and what it will mean for public services remains to be seen, but one has to wonder how much more can be cut back.


  1. Tory asset stripping to finance the country, and take as much from the poor in society as possible, and demonise them to justify their Tory policies, so nothing new. And we are all in it together. My son has gone from a semi detached house to a £2m detached home in the last year – he’s a banker !


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