40% cuts?

I hear Danny Alexander has asked each department to tell him how they might cut 40% from their budgets – save the ring fenced departments.

I suppose it’s a useful starter to the conversation he needs to have with each to settle their figure for next year. I am not sure it is so useful to have people condemning such savage cuts, when the totals in the budget tell us there is no need to cut anything that matters by 40% or anything like that figure. The totals show spending going up every year in cash terms for five years. That hasn’t changed. There is so much newspaper space being wasted over the cuts that will never be. Please leakers spare us the parade of the bleeding stumps in public. It’s such a stupid old hat way of conducting a review of public spending.

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27 Comments

  1. Emily
    Posted July 4, 2010 at 11:09 am | Permalink

    Apart from international aid which is ringfenced? Do we really send aid to countries developing nuclear weapons?

    There's so much that could be cut if people just accept that we can't live like princes. Perhaps we need to get "open all hours" on TV again to show people what life was like before ipods and internet?

  2. christina sarginson
    Posted July 4, 2010 at 11:09 am | Permalink

    Just heard the news myself about the 40% cuts, I think this is a very good way to sell theses issues to the public and I take my hat off to the coalition government in the way this has been handled, tell them the worst (40% cuts) and then make the cuts 25% and everyone will be happy or not!!!! Good thinking.

  3. oldrightie
    Posted July 4, 2010 at 11:18 am | Permalink

    I am unable to escape the idea that there is a sense of mischievous fun being had here at the expense of a fractured labour machine and the chatterati!

  4. Tapestry
    Posted July 4, 2010 at 11:37 am | Permalink

    In a way I agree. But there are other possibilities. Government revenues could fall faster than projected, as a return to growth is being assumed. Social mood is turning ugly, not matching the optimism that pervades in Westminster. A second 6% crash in growth would lop off another 25% from government revenues. Borrowing projections will be looking ad astra, in this scenario. It would be easier for the government to cut 40% than pay 10% on its long term borrowing.

  5. Alan Jutson
    Posted July 4, 2010 at 11:38 am | Permalink

    John.

    As a number of us have mentioned on this site before.

    If cash spent is going up each year for the next 5 years, why does your Party continue to take the flack for promotion of huge cuts. Why not send out a Press release saying expenditure is increasing.

    Goodness Knows we need some cuts to get things back in perspective and proper management. Indeed it is one of the reasons why your Party was elected.

    As I understood it. The NHS was going to be exempt (originally) as was some element of Overseas Aid. Are you suggesting that the increased spend on these two elements are of such a magnitude that they exceed the proposed cuts of the others.

    If I desire to save money and cut my household budget with reduced spending on each element, then my total spend is reduced, not increased.

    Sorry I just do not get it, unless the total spend is made up of increased benefits having to be paid to those who were in Public Employment who are made redundant, but then that means the increases paid out in Benefit have to be larger than their original wages.

    Can you please clarify.

  6. David Hough
    Posted July 4, 2010 at 12:22 pm | Permalink

    Hello John'

    I am a Labour supporter, but I accept that this is primarily an exercise carried by many businesses and organisations periodically. However, the question I want to know the answer to, is if further cuts are idnetified, would the coaltion just cut everything, all would they perhaps cut the one with greater monetary value, whilst allowing something else to stay?

  7. Brigham
    Posted July 4, 2010 at 12:28 pm | Permalink

    I have always thought that the cost of fuel is one of the biggest deterrents to growth. Of course, taxing fuel is a very easy way to raise revenue. It is very tempting to keep the cost of fuel high to placate the global warmers, but if the tax was raised all our manufactured goods could become more competitive on the world's markets. Or am I missing something?

  8. Mrs Davies
    Posted July 4, 2010 at 12:38 pm | Permalink

    It is a waste of time though for entire government departments to go through what must be quite a complicated procedure to write a plan for 40% cuts if there is no real intention for 40% cuts.

    I would be annoyed if someone asked me to do a lot of wasteful planning.

  9. English Pensioner
    Posted July 4, 2010 at 1:29 pm | Permalink

    We've all seen "Yes Minister" and know perfectly well how the Civil Service hierarchy works. They look for the worst possible scenario, and find the worst possible places for cuts in order to scare the public and fight against change.
    It would be worth offering big bonuses to any staff in the lower grades who could come up with ideas for cuts without affecting the services. Something like 10% of the first year's saving, paid to individuals, or groups of staff, who can come up with ideas would soon focus a few minds on whether the work is really necessary.

  10. A.Sedgwick
    Posted July 4, 2010 at 1:41 pm | Permalink

    Two of the areas were big savings could be made are being ring fenced. I think the NHS is the third biggest employer in the world, certainly in Europe, after Chinese Army and Indian Railway. The bureaucracy is legend and is evident from personal experiences, medics private anecdotes and published opinion and data. A simple comparison with dentistry, which even if you can get an NHS dentist you are happy with there is a cost, why not a £10 charge for every GP visit with a few exemptions e.g. children.

    As to overseas aid – many believe that most of this money is wasted, goes into the wrong pockets and numerous recipient countries should look at what their budget priorities are.

  11. Cliff.
    Posted July 4, 2010 at 5:19 pm | Permalink

    I see the media are reporting as if the forty percent cuts are already decided upon.
    I had hoped that once our party came into power that this government by media idea would end, sadly it has not.
    I wonder just how much of our government spending is created as a result of shouty media organisations.
    I am a believer in looking after our own first and therefore feel, the international aid budget should too be slashed, when everyone in our country are having to pull in our belts. Throwing money at places like Africa is not the answer; we have thrown money at them for atleast the last five decades and still the same problems endure.
    We should cut some money from the health budget; luxury items, such as sex change ops and IVF could be slashed.
    I suspect that if Mr Cameron asked the public if they wanted overseas aid cut and the aforementioned health department savings made, I am sure most would say yes but, how often do politicians actually listen to the public unless the public agrees with the politicians desired outcome? Europe anybody?

  12. kevin
    Posted July 4, 2010 at 10:21 pm | Permalink

    well said

  13. JohnRS
    Posted July 4, 2010 at 10:56 pm | Permalink

    Until the ridiculous ring fencing of huge areas of the budget is reversed then this kind of behaviour is going to have to continue. We all know that the so-called savage cuts announced inthe Emergency Budget are far too small to make the corrections needed. But limiting the axe to only part of the overall cake means bigger slices like this have to be taken out of the areas that are open.

    Dem Tories really need to get a grip and do this properly. Welfare/health and Internation Development must carry their fair share of the load.

  14. the Squeeze
    Posted July 4, 2010 at 11:04 pm | Permalink

    It's a good thought exercise. It might serve to highlight where the waste is so that it can be targetted better than it could be with 'blanket' cuts.

    Cabinet government and 'decapitation' makes it harder for new governments to get a grip of things, so Mr Alexander seems to be using his nouce.

  15. The college tutor
    Posted July 4, 2010 at 11:38 pm | Permalink

    But John,

    despite spending increases there will indeed be cuts. Whilst gross spending will go up in nominal terms, spending on useful items is likely to go down. The reason being that the interest payments will be increasing, both in absolute terms and as a percentage of govt spending.

    All the more reason to get the defecit down in my book. The blame for the cuts needs to be laid at the door of the last labour govt. Gordon Brown spent like a drunken sailor, now the hangover must be endured, and the bar bill paid. The cure for a hangover is not to keep drinking!

  16. george Rowley
    Posted July 5, 2010 at 7:27 am | Permalink

    Announcing, leaking or any way talking about 40% cuts is likely to add to peoples uncertainties. Many people are really worried and struggling to think about there future, this kind of PR is only making things worse.

  17. Mick Anderson
    Posted July 5, 2010 at 10:48 am | Permalink

    I'd prefer to assume 100% cuts, then have the various departments justify the things that they want money for.

    Don't start with the existing profligacy to try and make a saving. Start with a blank sheet of paper, and work out what is really needed.

  18. Ross J Warren
    Posted July 5, 2010 at 1:00 pm | Permalink

    We might have started with 100% as Mick points out. Then justify what is absolutely essential, I am certain that this is what George has in mind. He is also of course sending a very firm signal to the markets and the unions, that we are serious about cuts and are looking out for the sacred ,cows with butchers gleam in our eyes.

    Even so these are frightening times for many people, and we must question why such obvious glee is being indulged by some commentators. My poor old disabled Mother is now convinced she is going to be put on JSA, despite being 74, after all isn't the retirement age going to be raised to 80 and DLA abolished for anyone who can stand?

    As always in our green and pleasant land its the Press that is in typical bullish form is overstating the obvious in a irresponsible even malicious way.

  19. albion
    Posted July 5, 2010 at 1:26 pm | Permalink

    I visited an outdoor activity show yesterday and was shocked by the number of Army personnel who were in attendance to promote Army fitness class and the Territorial Army. Surely there must be fat ready for trimming there ….
    And what about Prince Charles? It's a disgrace he receives over one million Pounds from the Civil List. He should be told to make more profits from Duchy's Originals.

    • A Griffin
      Posted July 5, 2010 at 3:24 pm | Permalink

      George III surrendered the Crown Estate to Parliament in return for a Civil List annuity. The surplus revenue is paid to HM treasury ie. us!

  20. Conrad Jones
    Posted July 5, 2010 at 1:57 pm | Permalink

    Garuanteeing UK Arms Deal Payments:
    I don't know whether this practice still goes on – but Vince Cable has campaigned against this practice in the past – during Labour's Governnent. Garaunteeing payments for Arms Deals to "suspect" countries with dubious human rights records is both financially wrong and ethically wrong. Getting Taxpayers to pay the bills of corrupt and violent regimes to effectively GIVE them FREE weapons and allow Arms Dealers to profit. At least this won't be happening anymore.

    • fearandloathing
      Posted July 5, 2010 at 8:46 pm | Permalink

      I think you'll find that Robin Cook and his whole "ethical foreign policy" was also meant to remedy this. Once in office, with the whole weight of special interest lobbying, this was soon forgotten. I wouldn't hold my breath about it if I were you…

  21. Mr Ecks
    Posted July 5, 2010 at 2:03 pm | Permalink

    John,

    The fact is that 40% cuts would collapse most Departments. If Cammy baby and the Cleggs have decided to join the Libertarian Counter-Revolution (a la the great Sean Gabb) and collapse 99% of the rotten state all at once, I'm with you!!!.

    But since that seems very unlikly given that this Government are perhaps 5% less statist than the previous dross(although less evil–so far) then there seems NO swense whatsoever in making stupid announcements that can only help the Left.

  22. Conrad Jones
    Posted July 5, 2010 at 1:06 pm | Permalink

    Councils who Award Grants to Private Property Owners:

    Some other public money savings could be made regarding giving Grants to Private Landlords to help them prepare THEIR property for the Private Rental Market. I beleive that there is Preference given to Landlords who have had their properties empty for more than a year (in certain Inner London Boroughs). Then LHA and Housing Benefits are then paid to the Tenants which also ends up in the Private Landlords pocket. Is this what Labours "Public Private Partnership" meant. The "Public" pay, the "Private" profit with Taxpayers money. Coucil Landlord grants should be stopped now. No wonder they make so much "Lovely Money" – No wonder we cannot afford to fix our schools pay Nurses, Police and Fireman a decent wage. These services deserve our Taxes – NOT LANDLORDS.

  23. Javelin
    Posted July 5, 2010 at 5:56 pm | Permalink

    What I find amusing amongst left wing commentators (like the BBC) is that they ask the public to decide whether whole services are cut. “would you like to cut libraries or child care?” they ask. Would you rather loose your eyes or legs?

    Of course the analogy is of a diet, not amputation. Would you like to shed 10 of your 30 stone or die of a heart attack is a better analogy.

  24. Mark J
    Posted July 5, 2010 at 10:05 pm | Permalink

    Whilst I understand the need for cuts, why:

    1) Are we cutting £5 Billion from education, yet still giving away £7 Billion in Foreign Aid when the money is so desperately needed here? A lot of the Foreign Aid money does not go to where it is supposed to go to and is a waste! Why are we still giving aid to countries such as India and China when their economies are expected to outgrow ours?
    2) Are the laws on Immigration not tight enough to make clear that any incoming migrant will NOT be allowed to automatically claim benefits and will NOT be given free healthcare. How can the NHS cope with extra numbers when the funding is going down??
    3) Cutting welfare benefits is all well and good, however how can people be expected to find work with 2million + unemployed and only 800-900,000 job vacancies? Again immigration needs to be curbed until a point in time when more are needed. This should also apply to EU migrants. All well and good stopping 1 million non EU migrants when potentially more than that can flow into the country unchecked.

  25. Javelin
    Posted July 6, 2010 at 8:23 am | Permalink

    Stealth taxes and stealth borrowing.

    Gordon tried to hide his spending habit. Like any junkie he took stealthily. Whilst he was taxing stealthily he was also borrowing stealtily. Pensions, public private sector finance and other future liabilities. I still haven't seen these figures in full.

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    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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