Quangos will face ‘significant reductions’ when details on £6bn cuts are revealed next week

Quangos will face “significant reductions” when the government reveals next week how it will create £6bn savings this year.

Chancellor George Osborne has said the new Conservative and Liberal Democrat coalition will announce next week how it intends to make the £6bn savings across the public sector in 2010, and stressed there would be “significant reductions to the cost of quangos”.

The Conservatives had previously pledged to slash the number of quangos, as there are currently 790, costing at least £34bn a year.

Osborne made the announcement as he launched the independent Office of Budgetary Reform (OBR), which will provide assessments on the state of UK finances.

The OBR will initially operate on a non-statutory basis but will be given statutory authority following the Queen’s speech next week.

Osborne said: “The specific allocations of in-year savings will be announced a week today. These will include significant reductions to the cost of quangos.”

He also confirmed the departments of health, defence and international development would not be protected from cuts, but the money saved in these departments would be “reinvested in their front lines”.

He added: “The coalition has also agreed that, given the state of the public finances, the great majority of the £6bn of savings from other departments will be used to reduce the deficit.

“Some proportion will be used to support jobs in a targeted and effective way, as set out in the coalition agreement – for example, through the cancelling of some backdated demands for business rates.”

Osborne reasserted that the Treasury was convinced that the savings could be made without affecting the quality of key public services.

An emergency Budget will now be revealed on 22 June, which will set out spending cuts needed after 2010, but will also contain measures to boost enterprise and “demonstrate to the world that Britain is open for business”.

Last week, Personnel Today reported that the £6bn cuts would create a big HR challenge for the public sector.

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