21st Jan 2025 19:27
(Alliance News) - Government departments which do not meet a 5% savings target in the upcoming spending review will not get cash for "new priorities", a Treasury minister has warned.
Darren Jones, who as chief secretary to the Treasury acts as deputy to Chancellor Rachel Reeves, also signalled Government spending is "long overdue a reckoning".
As chief secretary, Jones is responsible for assessing ministers' requests for cash and has said he will adopt a "zero-based" approach that requires every pound the Government spends to be fully justified.
This could become a tough process.
Ministers have been told to find efficiency savings worth 5% of their departments' budgets, but the rising cost of borrowing could mean even steeper cuts are required if the Government is to meet the fiscal rules it has set itself.
The alternatives – greater borrowing or more tax increases – have been effectively ruled out by Reeves.
Speaking at the one-day conference of the influential Institute for Government think tank, Jones said: "Taxpayers and the users of public services obviously deserve better.
"We therefore won't settle for doing things the same and hoping for a different result, we have to do things differently, and we will.
"That is why funding from the Treasury to support new priorities will only be made available to departments that have first fulfilled the requirements of our zero-based review and met the minimum 5% savings and efficiency target required in this spending review process."
Chancellor Reeves announced on Tuesday that the spending review, when she is expected to reveal multi-year spending plans for Government departments, will take place on June 11.
In a signal of the drive to cut spending across Whitehall, Jones earlier said: "We are long overdue a reckoning with Government spending and a realistic appraisal of how we are using taxpayers' money, because as a moderniser with an optimism about the future for Britain, I just do not accept the idea that we should just keep spending more and more money for continued poor outcomes."
One of the problems facing ministers as the spending review approaches is the spiralling welfare bill, as more people of working age are claiming sickness benefits than before the pandemic.
Jones indicated rising sickness benefit costs were "an example of the system failing the people that we're worried about".
He added the Government was in particular worried about "young people who are at home, unwell, unable to access work opportunities, and that's partly because of access to things like mental health services or getting through the backlog in the NHS".
They are a "key driver in the projected spending of the welfare budget", Jones said.
The minister also pointed to a problem with "organised crime" in the system, "specifically the group of people who seem to be able to game the system and then run away with the money".
Jones said he will put data at the heart of decisions in the spending review, adding he would use AI technology which he dubbed "HMT-GPT" to gather data from across Government to assess spending.
source: PA
Copyright 2025 Alliance News Ltd. All Rights Reserved.