Pre-Budget Report: Regeneration to be ‘better targeted’

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Improved targeting of regeneration spend and rationalisation in the public sector were announced in Alistair Darling’s cost-cutting pre-budget report.

A total £340m will be saved by measures including prioritising regeneration and growth programmes that maximise value for money, from the conclusion of the new deal for communities programme, and from greater efficiencies in worklessness interventions.

Smaller DCLG funded community programmes will be ‘rationalised’ as part of a further £160m savings.

Measures including reducing lower priority provision within the adult skills budget and phasing out temporary employment programmes would also contribute towards a total £5bn of ‘prioritisation’ savings.

Mr Darling estimated that a further £12bn would be saved in ‘greater efficiency’ in the public sector by abolishing quangos, cutting consultancy and marketing costs, improving procurement and streamlining back-office functions.

Mr Darling said: ‘We have begun a root and branch review to examine every area of government spending to drive through efficiency, cut waste and cut lower priority budgets.’

Mr Darling described the measures as ‘tough choices, but necessary choices’.

All public sector pay settlements will be capped at 1% for two years from 2011, while state contributions to public service pensions for teachers, councils, NHS and the civil service to be capped by 2012, saving £1bn a year.

The senior civil service will see a cut in its pay bill of up to £100m over three years.

Grahame Smith, general secretary of the Scottish TUC said: ‘While we accept that there are savings to be gained from cutting back on the public sector’s use of consultants, we find it difficult to accept that cuts of this magnitude will not have a seriously detrimental impact on services.’

Capital spending is to be cut aggressively, a move think-tank IPPR said was ‘just building up problems for the future’.

‘Spending on transport links and high-speed broadband will boost the economy’s competitiveness and growth rate in the medium-term,’ said Lisa Harker, co-director of IPPR.