LONDON (Reuters) -British finance minister Rachel Reeves said she wanted government departments to find 5% savings in their budgets in an attempt to cut waste and focus on policy priorities, in an overhaul how the public sector works ahead of a spending review.
The Treasury said in a statement that every pound the government spends would be subjected to a line-by-line review to ensure it was being spent on delivering the agenda that Starmer set out last week, and giving value for money.
The last time government departments were asked to undertake a so-called ‘zero-based review’ of public spending was 17 years ago, it said.
The government is due to announce the details of its multi-year spending review next year.
Reeves said that reform of public services would ensure they were “up to scratch for modern-day demands,” and that by inspecting every pound of government spend, the government would put an end to waste.
“I have no doubt that we can find efficiency savings within government spending of 5% and I am determined to do so,” Reeves told reporters on Tuesday.
“It’s through finding those efficiency savings that we’ll have the money to spend on the priorities of the British people.”
Departmental budgets will be scrutinised by panels of external experts and letters had been sent to each department advising they should take “difficult” decisions to stop any spending that does not contribute to a government priority.
Reeves said in October that she was aiming to balance day-to-day spending with tax revenues by the end of the decade and she set tight limits for spending on public services in the coming years.
Following an election win for the Labour Party in July, Reeves’ first budget was criticised by businesses for increasing tax on hiring, and demand for workers in Britain collapsed following the announcement, a survey showed on Monday.
Asked if she would put up taxes again next year, she said she couldn’t write future fiscal policy now, but said that October’s budget was a one-off.
(Reporting by Alistair Smout and Sachin Ravikumar; Editing by William Schomberg and William James)
