Cabinet this morning can’t have been a cheery occasion. The Prime Minister did congratulate all those who had been involved in the Leveson talks, with a little bit more congratulation from the Deputy Prime Minister and Maria Miller. But that was where the backslapping stopped. the Chancellor and the Chief Secretary to the Treasury announced that OBR forecasts tomorrow will show that departments are underspending more of their budgets than the historical average. As a result, departments will now be required to reduce their spending by a further 1 per cent in 2013/14 and 2014/15, which amounts to a further £2.5 billion to fund capital investment projects in tomorrow’s Budget.
The £1.2 billion that has already been saved will be used as a ‘downpayment’ for the 2015/16 spending review, which means departments will now be looking for savings of around £8.8 billion, rather than £10 billion in that spending period.
And in case there was any chance that the National Union of Ministers would kick up a fuss about these further cuts in spending, Theresa May, Philip Hammond and Eric Pickles all get significant concessions in their budgets. The Prime Minister’s official spokesman said that the Ministry of Defence will benefit from ‘exceptional flexibility that means that £1.6 billion of its underspend will be rolled over into the next two years, those two years, 2013/14 and 2014/15, and that is actually worth more than the headline budget cuts announced today’.
As for May and Pickles, the local government grant and police grant for 2013/14 won’t be affected by the cuts, although their departments will still be expected to cut spending by a further 1 per cent in both years. But the police budget accounts for around two-thirds of the total Home Office Budget.
And of course schools, health and development spending will remain protected. So the Tory NUM members might be soothed a little by these concessions. But what about Vince Cable, who has been just as vocal about the dangers of cutting his department’s budget? Or indeed other Cabinet ministers whose budgets don’t enjoy protections or who haven’t been quite so vocal?