‘Nothing off the table’: Public spending cuts to be ‘ruthless’, cabinet warned
Public spending cuts are set to be “ruthless”, the Treasury has reportedly warned cabinet ministers.
Departments will have to make “difficult” decisions on their budget priorities, according to an internal letter from No11 about the spending review, the Telegraph reported.
While the Prime Minister’s official spokesman confirmed “there’s nothing off the table when it comes to delivering value for money for taxpayers”.
It comes as the Prime Minister Sir Keir Starmer and Chancellor Rachel Reeves face another week of economic turmoil after interest rates on government debt went soaring, throwing Labour’s public spending plans and the “non-negotiable” fiscal rules into jeopardy.
The letter, seen by the newspaper, was sent to the cabinet by Darren Jones, chief secretary to the Treasury, on 12 December, and sets out the approach to the June spending review.
He wrote: “Growth is the only way that we can deliver better outcomes in public services, without raising taxes on working people and is our primary mission for this Parliament.
“Spending Review 2025 cannot be a business-as-usual spending review. Building on our missions, the plan for change set out ambitious milestones that must be delivered within the challenging fiscal context we inherited. Success will require ruthless prioritisation.”
Jones, the Telegraph said, added that HMT would “conduct a full review of every line of government spending”, and dubbed the process ‘phase two’ after the October Budget.
He continued: “It is crucial that in phase two we maximise the value of every pound spent to set the government on course to deliver the plan for change, within the spending envelope set at the Autumn Budget. Phase two will, therefore, be zero-based.
“Together, we will conduct a full review of every line of government spending to assess whether it is a priority for this government and represents value for money.
“Some of these decisions will be difficult, but the public expects us to root out government waste and ensure their taxes are being spent on their priorities.”
Starmer’s ‘five missions’ to achieve specific targets in certain policy areas, such as cutting NHS waiting lists, improving early education, increasing police numbers, raising household incomes, building 1.5m homes and creating a green energy supply, will be best funded.
While other areas including local councils, courts and welfare spending could face further cuts, on top of an anticipated five per cent budget reduction.
Reeves and Jones will both make speeches on boosting growth and public spending, with the Chancellor’s – later this month – expected to focus on pro-growth regulation and planning.
The Prime Minister’s official spokesman told journalists on Monday: “When it comes to productivity, we have to deliver on waste, on inefficiency in the public sector.
“The public would rightly expect that every pound of taxpayer money is being spent as efficiently as possible. We can’t operate in a business as usual way when it comes to tackling waste – nothing’s off the table.”
Asked if this included the benefits bill, he said: “Absolutely, there’s nothing off the table when it comes to delivering value for money for taxpayers.”