One of the biggest announcements from the Budget was one that may not happen, and if it does, is unlikely to be implemented for several years. George Osborne told parliament:
If in the next spending review we maintain the same rate of reductions in departmental spending as we have done in this review, we would need to make savings in welfare of £10bn by 2016.
The figure was ignored by most people: we don’t yet know when the next spending review is, and the figure of £10bn is fairly nebulous without actually knowing what will be cut.
But the announcement was not ignored in DWP, where efforts to slash the benefit bill have led to controversial policies such as the welfare cap and spare bedroom tax. Ministers there feel there is little slack to left to cut from the welfare bill, so were concerned to here of the chancellor’s plans.
This is why, when we asked Chris Grayling, the employment minister, what he thought of the plans, he was keen to stress that the savings could come from other departments:
That £10bn is a figure that applies across government. He expressed the desire that we make further savings in welfare as part of that, but … we haven’t begun that kind of discussion yet.
It is a strikingly different tone to that taken by Osborne, who was pretty clear that the money would come from welfare. But the fight is on, and DWP is gearing up for battle. One official told us:
From our perspective, we wouldn’t see this as simply £10bn off the DWP budget, and I’m pretty sure we’ll be making that point as and when we sit down with the Treasury.
The negotiations for the next spending review, it seems, have begun especially early.
Jim Pickard
Kiran Stacey