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
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
  • 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

Ashdown Group: Front-End UI Application Developer

£30000 - £40000 per annum + Benefits: Ashdown Group: Front-End UI Application ...

Recruitment Genius: Digital Account Executive

£18000 - £26000 per annum: Recruitment Genius: They work with major vehicle ma...

Recruitment Genius: Service Engineers - Doncaster / Hull

£27000 per annum: Recruitment Genius: Domestic Service Only Engineers are requ...

Recruitment Genius: Employability / Recruitment Adviser

£23600 - £27500 per annum: Recruitment Genius: The Employability Service withi...

Day In a Page

Where the spooks get their coffee fix: The busiest Starbucks in the US is also the most secretive

The secret CIA Starbucks

The coffee shop is deep inside the agency's forested Virginia compound
Revealed: How the Establishment closed ranks over fallout from Loch Ness Monster 'sighting'

How the Establishment closed ranks over fallout from Nessie 'sighting'

The Natural History Museum's chief scientist was dismissed for declaring he had found the monster
One million Britons using food banks, according to Trussell Trust

One million Britons using food banks

Huge surge in number of families dependent on emergency food aid
Excavation at Italian cafe to fix rising damp unearths 2,500 years of history in 3,000 amazing objects

2,500 years of history in 3,000 amazing objects

Excavation at Italian cafe to fix rising damp unearths trove
The Hubble Space Telescope's amazing journey, 25 years on

The Hubble Space Telescope's amazing journey 25 years on

The space telescope was seen as a costly flop on its first release
Did Conservative peer Lord Ashcroft quit the House of Lords to become a non-dom?

Did Lord Ashcroft quit the House of Lords to become a non-dom?

A document seen by The Independent shows that a week after he resigned from the Lords he sold 350,000 shares in an American company - netting him $11.2m
Apple's ethnic emojis are being used to make racist comments on social media

Ethnic emojis used in racist comments

They were intended to promote harmony, but have achieved the opposite
Sir Kenneth Branagh interview: 'My bones are in the theatre'

Sir Kenneth Branagh: 'My bones are in the theatre'

The actor-turned-director’s new company will stage five plays from October – including works by Shakespeare and John Osborne
The sloth is now the face (and furry body) of three big advertising campaigns

The sloth is the face of three ad campaigns

Priya Elan discovers why slow and sleepy wins the race for brands in need of a new image
How to run a restaurant: As two newbies discovered, there's more to it than good food

How to run a restaurant

As two newbies discovered, there's more to it than good food
Record Store Day: Remembering an era when buying and selling discs were labours of love

Record Store Day: The vinyl countdown

For Lois Pryce, working in a record shop was a dream job - until the bean counters ruined it
Usher, Mary J Blige and Will.i.am to give free concert as part of the Global Poverty Project

Mary J Blige and Will.i.am to give free concert

The concert in Washington is part of the Global Citizen project, which aims to encourage young people to donate to charity
10 best tote bags

Accessorise with a stylish shopper this spring: 10 best tote bags

We find carriers with room for all your essentials (and a bit more)
Paul Scholes column: I hear Manchester City are closing on Pep Guardiola for next summer – but I'd also love to see Jürgen Klopp managing in England

Paul Scholes column

I hear Manchester City are closing on Pep Guardiola for next summer – but I'd also love to see Jürgen Klopp managing in England
Jessica Ennis-Hill: 'I just want to give it my best shot'

Jessica Ennis-Hill: 'I just want to give it my best shot'

The heptathlete has gone from the toast of the nation to being a sleep-deprived mum - but she’s ready to compete again. She just doesn't know how well she'll do...