Conservative Diary

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Highlights from the Comprehensive Spending Review

By Tim Montgomerie

Screen shot 2010-10-20 at 12.39.05 Delivering his statement George Osborne alongside other members of the 'Quad' - the four people who have overseen the CSR.


  • Britain has the largest structural deficit - £109bn - in Europe. We are paying £120 million in interest every day on servicing the debts left behind by Labour's Decade of Irresponsibility. The IMF, OECD, CBI and Governor of the Bank of England all agree that we need to bring borrowing down, as the Coalition has proposed.
  • It takes time to turn around the debt supertanker and the cost of interest payments will still be £63bn by the end of the parliament.
  • The three guiding principles for the CSR have been the elimination of waste, a fair sharing of the costs of deficit reduction and investment in growth, including science, infrastructure and education.


  • The Coalition will exceed its waste reduction targets - eliminating £6bn in waste in Whitehall rather than £3bn.
  • The administrative budgets of every government department will be cut by a third.
  • Over four years 490,000 jobs will go in the public sector - largely through natural turnover.
  • Royal Household Budget to be cut by 14%.
  • 7.1% pa cut in local government funding but all ringfencing will be lifted.
  • £2bn extra for social care.
  • Aid budget will grow by 37% over next four years. Britain will be first major nation in world to spend 0.7% of national income on fighting global poverty.
  • Police budgets will be cut by 4%pa for four years. Overall Home Office and Justice budgets to fall by 6%pa.
  • £900m more to be spent on tackling illegal tax dodging in the hope of recovering £7bn in lost revenues. A crackdown on welfare fraud and overpayment will yield £5bn.
  • Confirms state pension age will be raised to 66 in 2020.
  • £1.8bn will be saved from public sector pensions. Final salary pension scheme for MPs will close.
  • Sick pay will be limited to 12 months except in extreme circumstances.
  • "We will keep benefits for pensioners, free eye tests and prescriptions, bus passes, tv licenses and winter fuel".
  • Equitable Life holders will get £1.5bn in compensation (two-thirds in next four years).
  • 50% increase in spending on adult apprenticeships.
  • Science spending of £4.6bn will be protected.
  • 5%pa decrease in Energy and Climate Change budget but £1bn allocated to Green Investment Bank.
  • 8%pa decrease in DEFRA budget.
  • Health spending will grow by real terms plus £4bn over next four years.
  • Free entry to museums and galleries will stay.
  • Licence fee will be frozen for six years and the BBC has guaranteed that it will not encroach upon the growth of private local media entities.
  • £30bn will be invested in transport projects over next four years, including Crossrail. Victory for the Mayor of London.
  • Train fares up by RPI + 4%pa.
  • 7.1%pa cut in Business Dept's budget.
  • Spending up by 0.1% in real terms for next four years for nation's schools. £2.5bn pupil premium will be introduced for poorest children.
  • Sure Start spending frozen in cash terms.
  • Because of modelling error (Gary Gibbon explains) the child benefit restriction will save £2.5bn not £1bn.


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