Chancellor George Osborne has launched the 2015 spending review and has announced a further £20 billion savings from government departments by 2020 – that equates to cuts of up to 40 per cent, and is in addition to the £12 billion previously announced in welfare spending cuts.
The Conservatives back the policies, saying that the cuts are there to provide "security" for the country.
Titled 'A country that lives within its means', the review explains: "The government is committed to putting Britain's security first. When it comes to the economy, and providing security for working families, that means finishing the job or repairing Britain's finances."
The review is expected to be completed later this year and actual decisions based on the findings will be announced on November 25th.
Mr Osborne has asked government departments to come up with measures that will enable them to achieve cuts of both 25 and 40 per cent.
A handful of departments will be safe from these additional cuts – these include health, defence, schools and overseas aid.
Notably, housing is not protected from cuts, as it is covered by the Department for Communities and Local Government.
In a tweet, the chancellor explained that the government must provide value to taxpayers.
"The money we spend is not the government's money but the taxpayer's money. We have a duty to get the very best value for money," he said, adding that the next step in the government's plan is to eliminate deficit, run a surplus and making sure the country lives within its means.
Mr Osborne also pointed out that taxpayers currently own more than £300 billion of land and buildings – this comment has led experts to believe public land is likely to be sold. The chancellor is also urging for a cross-department effort to built 150,000 new homes on public sector land by 2020.
The review also pointed out improvements that have been made over the past five years – such as employment reaching "near-record levels". Currently, 31 million people are in work – a gain of around two million since 2010.
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.