2010 Spending Review
A spending review for the years 2011/12 through to 2014/15 was announced by the coalition government. This review was driven by a desire to reduce government spending in order to cut the budget deficit.
Chancellor of the Exchequer George Osborne announced the details of the spending review on 20 October 2010. The cuts have been described as the biggest since World War II. The review will lead to an £81 billion cut in public spending in the remaining four years of the parliament, with average departmental cuts of 19%. In addition major changes in welfare were announced including £7 billion of extra welfare cuts, changes to incapacity benefit, housing benefit and tax credits and a rise in the state pension age to 66 from 2020. Public sector employees will face a £3.5 billion increase in public pension contributions.
The Home Office faces cuts of 25%, local councils will face a yearly 7% cut in funding from central government each year until 2014. The Ministry of Defence will face cuts of around 8%. In addition many other public sector bodies will face cuts to their funding. Although not part of government the BBC had its licence fee frozen for 6 years and will take on the funding of the BBC World Service, BBC Monitoring and S4C. The Office for Budget Responsibility predicts that the spending review will lead to a loss of about 490,000 public sector jobs by 2015. The NHS will see a 0.4% increase in spending in real terms over the following 4 years.
A £200 million payment was announced to compensate savers in the collapsed savings society Presbyterian Mutual.
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