Last month, we mapped out what each department could expect to face in the June spending review given the Treasury’s promise to keep cutting at the same pace as it has done before.
That study showed some of the most sensitive departments were in line for the steepest cuts. Local government was in line for £1.3bn of cuts, the business department, just over £1bn, and most sensitively of all, defence, nearly £700m.
Those calculations, however, only got us up to just over £7bn of cuts. We decided to take a cautious view, sticking to the idea of spending falling at the same trajectory as it has been so far, rather than striving to hit the £10bn figure.
Yesterday, however, the Treasury confirmed its final figure for the 2015-16 departmental cuts. And rather than being reduced from £10bn, it has actually increased, to £11.5bn. That means that those departments are going to suffer even more than previously expected.
We have seen calculations by the Institute of Public Policy Research which show defence is in line for a bigger cut than any other department, and faces having to make £1.7bn in savings – far worse than originally thought. Philip Hammond has already been fighting these cuts at cabinet level – the new figures show that he has an even bigger fight on his hands than previously thought.
The figures fly in the face of suggestions by David Cameron in January that he might ringfence the defence budget – suggestions that were quickly withdrawn after the Treasury made it clear cuts would have to be made to the MoD.
Nick Pearce, the director of the IPPR, said:
This is the scale of the battle that the ‘National Union of Ministers’ is going to have to have with the Treasury this summer. If these cuts go ahead, it means a major impact on housing, early years and other local government services.
Here are the full IPPR figures outlining the chancellor’s stark choices:
Jim Pickard
Kiran Stacey