Britain on Monday unveiled details of £6.243 billion savings in government spending this year to tackle the £156 billion deficit.
Chancellor of exchequer George Osborne and his LibDem deputy David Laws on Monday cut budgets across all ministries and one of the biggest cuts, £1.7 billion, will be made by “delaying and stopping contracts and projects, including immediate negotiations to achieve cost reductions from the major suppliers to government.”
“We will save over £1 billion in discretionary spending including consultancy and travel costs. Nearly £2 billion from IT programmes, suppliers and property. Over £700 million from restraining recruitment and cutting quangos and over £500 million from cutting low value spending,” Mr Osborne said, adding that it was just a matter of cutting “wasteful spending.”
The contract between Tata Consultancy Services and department of work and pensions, which was estimated to be worth about £600 million, could face a review under this decision as the contract was only approved in March this year.
“The government is reviewing all recent spending approvals, to ensure that they are consistent with the government’s priorities and good value for money,” a department for works and pensions spokesperson said after the spending cuts were announced. However, the ministry refused to confirm whether the contract would be reviewed under the spending cuts decision made by Mr Osborne. There was no response from TCS over queries on the effect of spending cuts on their contract.
“Sometimes in politics there are no easy choices. But the worst choice of all would be to fail to put in place a credible plan to reduce Britain’s bloated budget deficit,” Mr Laws said.
Amongst the ministries, the biggest loser is the business innovation and skills department headed by LibDem deputy leader Vince Cable. A staggering £836 million will be cut from its budget, followed by communities and local government department, which will see its budget cut by £780 million. The department for work and pensions will see cuts of £535 million this year.
The government will save £10 million from cracking down on first class travel and £5 million from restricting ministerial entitlement to a dedicated car and driver. In a controversial decision, which will lead to protests, the coalition government will make £320 million in savings by reducing and then stopping government contributions to the Child Trust Fund.