Blitz Bureau
MINISTERS have been told to stop spending that does not contribute to the Government’s priorities, as Chancellor Rachel Reeves on December 10 promised to take “an iron fist against waste”.
Reeves will ask departments to identify efficiency savings worth 5 per cent of their current budgets, under a review of their spending plans for the coming years. Budgets will also be scrutinised by panels, including former senior bankers, to advise what spending is necessary.
The Conservatives said Reeves had so far failed to make the public sector more efficient, or cut back on welfare spending.
The Treasury says the spending review will be “zero-based,” meaning departments will have to justify all spending anew for each year. It will set departments’ day-to-day spending between 2026 and 2029, and investment budgets for the next five years.
Guidelines will set out that they will be “advised that where spending is not contributing to a priority, it should be stopped”.
Last week, Prime Minister Sir Keir Starmer set out his Plan for Change, including the ‘six milestones’ he wanted to meet before the next election. These include building 1.5 million homes in England, and treating 92 per c ent of NHS patients within 18 weeks.
The Treasury says the Chancellor will “work with departments to prioritise spending that supports the milestones to deliver the plan”, indicating that some areas not deemed a priority will be downgraded. Budgets will be reviewed by panels, including former senior management at Lloyd’s Banking Group, Barclays Bank and the Co-operative Group workinwg alongside experts from think tanks, academics and others from the private sector. The Treasury says the panels will “bring an independent view to what government spend is or isn’t necessary”.
