Magazine article Public Finance

Whitehall Must Prepare to Cut Back, IFS Warns

Magazine article Public Finance

Whitehall Must Prepare to Cut Back, IFS Warns

Article excerpt

Most Whitehall departments will face a spending squeeze in the 2007 Comprehensive Spending Review if the chancellor sticks to the spending limits outlined in his Pre-Budget Report, independent experts have warned.

The Institute for Fiscal Studies said that if Gordon Brown keeps to the annual spending limits for 2008/09, 2009/10 and 2010/11 outlined for the first time in his PBR in December, public spending will increase by just 1.8% per year in real terms.

The economic think-tank made the projection in its Green Budget 2006, published on January 25, which analyses the chancellor's options in his forthcoming Budget.

According to the IFS, allowing for modest increases in health and education spending of 4.4% and 2.4% a year respectively would leave just 0.8% a year in real terms for all other Whitehall ministries.

As a result, areas such as policing, defence, transport and local government could all expect to see funding squeezed. …

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