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| Version 2 | Version 3 |
|---|---|
| Osborne to unveil extra £2.5bn cuts | Osborne to unveil extra £2.5bn cuts |
| (35 minutes later) | |
| The government is to announce further spending cuts in Wednesday's Budget, with the savings going to large-scale infrastructure projects designed to boost economic growth. | The government is to announce further spending cuts in Wednesday's Budget, with the savings going to large-scale infrastructure projects designed to boost economic growth. |
| Most Whitehall departments will have to cut 2% of their spending over the next two years, amounting to about £2.5bn. | Most Whitehall departments will have to cut 2% of their spending over the next two years, amounting to about £2.5bn. |
| But health, schools and HM Revenue & Customs budgets will be unaffected. | But health, schools and HM Revenue & Customs budgets will be unaffected. |
| The cuts come on top of the 3% spending reductions announced for the next two years in last year's Autumn Statement. | The cuts come on top of the 3% spending reductions announced for the next two years in last year's Autumn Statement. |
| Chancellor George Osborne told his colleagues of the plan at Tuesday's cabinet meeting. | Chancellor George Osborne told his colleagues of the plan at Tuesday's cabinet meeting. |
| Overseas aid will also be shielded from the cuts, while local government and police budgets will be protected for the first year. | Overseas aid will also be shielded from the cuts, while local government and police budgets will be protected for the first year. |
| However, other government departments - such as justice, environment and Scotland, Wales and Northern Ireland - will be told to deliver a further 1% cut to their day-to-day budgets in both 2013-14 and 2014-15. | However, other government departments - such as justice, environment and Scotland, Wales and Northern Ireland - will be told to deliver a further 1% cut to their day-to-day budgets in both 2013-14 and 2014-15. |
| Unspent cash | Unspent cash |
| A No 10 spokesman said the announcement had been greeted with "unanimous agreement" around the cabinet table, with ministers saying it "was the right thing to do". | A No 10 spokesman said the announcement had been greeted with "unanimous agreement" around the cabinet table, with ministers saying it "was the right thing to do". |
| The move had been made possible by under-spending by government departments this year, which "reflected the success that secretaries of state across the board have had, working with the Treasury, on bringing departmental resource spending down". | The move had been made possible by under-spending by government departments this year, which "reflected the success that secretaries of state across the board have had, working with the Treasury, on bringing departmental resource spending down". |
| The Ministry of Defence is being given special leeway to roll over unspent cash worth £1.6bn to the department over the next two years. | The Ministry of Defence is being given special leeway to roll over unspent cash worth £1.6bn to the department over the next two years. |
| Total annual underspends across Whitehall have averaged about £6bn since 2007 and the figure for 2012-3 will be announced on Wednesday. | Total annual underspends across Whitehall have averaged about £6bn since 2007 and the figure for 2012-3 will be announced on Wednesday. |
| The government has come under pressure to increase spending on capital projects, such as roads and housing, with its critics saying it is not doing enough to help economic growth. | The government has come under pressure to increase spending on capital projects, such as roads and housing, with its critics saying it is not doing enough to help economic growth. |
| 'Perfect opportunity' | |
| Lib Dem business secretary Vince Cable has led calls for this in cabinet but David Cameron and Nick Clegg have ruled out funding such a move by increased borrowing. | Lib Dem business secretary Vince Cable has led calls for this in cabinet but David Cameron and Nick Clegg have ruled out funding such a move by increased borrowing. |
| Lord Deighton, the minister charged with accelerating the delivery of major infrastructure projects, briefed cabinet on progress on Tuesday. | Lord Deighton, the minister charged with accelerating the delivery of major infrastructure projects, briefed cabinet on progress on Tuesday. |
| In its 2010 spending review, the government originally announced departmental spending cuts averaging 19% up to 2014-2015. | |
| A review of spending for the 2015-16 period will take place in June, Mr Osborne said recently. | |
| The TUC estimated that the extra £2.5bn a year for infrastructure would "boost growth by a measly 0.06%". | |
| "Worse still, funding it through departmental spending cuts will mean further reductions in public services," said general secretary Frances O'Grady. | |
| "With interest rates negative in real terms, the chancellor has the perfect opportunity to invest in Britain's future, rather than raiding departmental budgets to cover his failed economic strategy." |