Government departments told to prepare for 25%-40% cuts

Government departments will not be forced to axe 40% from their budgets – despite being ordered to plan for cuts on that scale, a Cabinet minister has said.

In the Budget last month, chancellor George Osborne said departments would face average cuts of 25% when the government’s public spending review is completed in October.

But transport secretary Philip Hammond said some departments have been told to go through their budgets “line by line” for savings of between 25% and 40%.

He warned some departments may see cuts “a bit higher” than the 25% announced in the Budget and some “a bit lower”.

Hammond added ministers wanted to avoid a “salami slicing” approach, with each department taking an equal hit.

Trade unions have claimed ministers are using the 40% figure to make eventual cuts seem more acceptable.

Hammond told the BBC: “I don’t expect any departments will see a 40% cut, but some departments may see cuts a bit higher than 25%, some departments may then see cuts a bit lower than 25%.

“We are going to look at the priorities of the coalition. We are going to look at the individual impacts on departments – and that’s why departments are being asked to prepare not only a 25% case but also a 40% case”.

Shadow home secretary Alan Johnson said the suggestion the scale of cuts being proposed would not affect front-line public services was “fantasy land”.

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