Treasury's tough new spending rules

In a speech yesterday to the Institute of Fiscal Affairs, Chief Secretary to the Treasury Danny Alexander revealed that government departments are being asked to identify a further 16bn of savings that they could make if new pressures emerge or new policies have to be funded before the end of this parliament.

Alexander insisted that the government is making good progress in tackling debt, stating that:

"even as we take the tough decisions to tackle that debt, we are making sure that it’s not the poor and vulnerable who are forced to carry the burden, and that those who have the most contribute the most."

But he pointed out that, with three years to go, very difficult decisions remain to be implemented - only 30 per cent of planned cuts have yet been delivered.

Departments have been asked to identify around 5 per cent of their resource budget that could be re-prioritised if new pressures emerge or new policies have to be funded, rather than relying on the the contingency reserve, which has been kept deliberately small.

The Treasury is also introducing a new requirement for departments to provide it with consistent monthly spending information, allowing departments "to build a shared understanding of where the risks lie and how they are managed, as and when they arise".
And even as we take the tough decisions to tackle that debt, we are making sure that it’s not the poor and vulnerable who are forced to carry the burden, and that those who have the most contribute the most.