Osborne will struggle to cut another £77bn, warn MPs

Serious doubts over George Osborne's ability to slash £77bn from government spending are raised by an influential group of MPs today.

They warn that Whitehall has yet to identify where all the money can be found – and say they are worried the Chancellor still does not have a firm enough grip on driving through the austerity programme.

Eighteen months ago, Mr Osborne announced a four-year spending squeeze, with some departments suffering cuts to their budgets of 25 per cent by 2014-2015.

Amid grim economic figures, he has since warned that the country faces a further two years of cuts lasting well beyond the next general election.

In a report today, the Public Accounts Committee (PAC) said it was worried about the lack of progress in preparing for future cuts, which will see frontline services reduced and thousands of civil servants made redundant.

It said departments coped well with the first year of the measures, achieving a £7.9bn saving through 44,000 job losses and reductions to back-office costs and spending on capital projects. But the PAC warned Whitehall faced a "more significant challenge" in cutting spending by a further 19 per cent. And the MPs warned the extension of the austerity measures beyond the election meant departments would need a "radical approach" to finding savings.

It said major reforms in health, education and justice would help to save cash, citing the example of planned changes in legal aid and sentencing policy which is intended to save £1bn a year for the Ministry of Justice headed by Kenneth Clarke. However, the MPs added that the Treasury and the Cabinet Office had to adopt a more hands-on role to ensure cuts were delivered with as little pain as possible.

"An informed lead should be given by the centre if arbitrary cuts are to be avoided," they said. "A long-term forward strategy is needed and departments must look increasingly to wider reforms to deliver more fundamental and systemic change in how government delivers services."

The former minister Margaret Hodge, the PAC's chair, said: "Departments need to do better at planning their finances logically, understanding the relationship between costs and outcomes better and not going for the easy option which could most damage frontline services."

She warned of a danger of cuts in one department leading to extra spending elsewhere in Whitehall.

"The Treasury needs to get a grip at the centre on the approach taken by departments, otherwise government will impose arbitrary cuts and fail to secure value for money," she added.

Ms Hodge also saidfinancial officers in Whitehall departments should be "held accountable for delivering more with less" – and should be rewarded for success and penalised for failure.

A Treasury spokesman said: "We welcome the PAC's recognition of the success of departments in delivering budget reductions so far.

"The Treasury has a very clear and systematic approach to controlling public spending. It also constantly seeks to improve this, which is why earlier this week the Chief Secretary set out new, tighter rules to improve financial management in Whitehall and help departments live within existing budgets."

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
filmPoldark production team claims innocence of viewers' ab frenzy
Life and Style
Google marks the 81st anniversary of the Loch Ness Monster's most famous photograph
techIt's the 81st anniversary of THAT iconic photograph
News
Katie Hopkins makes a living out of courting controversy
people
Voices
All the major parties are under pressure from sceptical voters to spell out their tax and spending plans
voices
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
Arts and Entertainment
Kevin Spacey and artistic director Matthew Warchus at the Old Vic party to honour Spacey
theatreStar's successor at Old Vic theatre admits he's 'allergic to hype'
Life and Style
life + healthVirginia Ironside's dilemma, during Depression Awareness Week
Arts and Entertainment
The median income for professional writers is just £10,432, less than the minimum wage
booksSurvey reveals authors' earnings
News
i100
Life and Style
fashion
  • Get to the point
2015 General Election
May2015

Poll of Polls

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Office Administrator

£14000 - £18000 per annum: Recruitment Genius: An Office Administrator is requ...

Recruitment Genius: Sales Executive - Commercial Vehicles - OTE £40,000

£12000 - £40000 per annum: Recruitment Genius: Due to expansion and growth of ...

Ashdown Group: Senior PHP Developer - Sheffield - £50,000

£40000 - £50000 per annum: Ashdown Group: Senior PHP Developer position with a...

Recruitment Genius: Operations Leader - Plasma Processing

Negotiable: Recruitment Genius: An Operations Leader is required to join a lea...

Day In a Page

Revealed: Why Mohammed Emwazi chose the 'safe option' of fighting for Isis, rather than following his friends to al-Shabaab in Somalia

Why Mohammed Emwazi chose Isis

His friends were betrayed and killed by al-Shabaab
'The solution can never be to impassively watch on while desperate people drown'
An open letter to David Cameron: Building fortress Europe has had deadly results

Open letter to David Cameron

Building the walls of fortress Europe has had deadly results
Tory candidates' tweets not as 'spontaneous' as they seem - you don't say!

You don't say!

Tory candidates' election tweets not as 'spontaneous' as they appear
Mubi: Netflix for people who want to stop just watching trash

So what is Mubi?

Netflix for people who want to stop just watching trash all the time
The impossible job: how to follow Kevin Spacey?

The hardest job in theatre?

How to follow Kevin Spacey
Armenian genocide: To continue to deny the truth of this mass human cruelty is close to a criminal lie

Armenian genocide and the 'good Turks'

To continue to deny the truth of this mass human cruelty is close to a criminal lie
Lou Reed: The truth about the singer's upbringing beyond the biographers' and memoirists' myths

'Lou needed care, but what he got was ECT'

The truth about the singer's upbringing beyond
Migrant boat disaster: This human tragedy has been brewing for four years and EU states can't say they were not warned

This human tragedy has been brewing for years

EU states can't say they were not warned
Women's sportswear: From tackling a marathon to a jog in the park, the right kit can help

Women's sportswear

From tackling a marathon to a jog in the park, the right kit can help
Hillary Clinton's outfits will be as important as her policies in her presidential bid

Clinton's clothes

Like it or not, her outfits will be as important as her policies
NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders