Chancellor George Osborne has promised to limit spending cuts on the most vulnerable and on areas heavily dependent on the public sector as he outlined his framework for future spending decisions today.
Speaking during Treasury questions in the House of Commons today, Osborne promised the government would also deliver its guarantee that health spending would increase in real terms in each year of the Parliament.
The spending review, which will be published this autumn, will set departmental budgets for the years 2011-12 to 2014-15, and Osborne said this would go far beyond the first round of £6bn of cuts announced for this year.
He insisted the government was committed to tackling the deficit and restoring debt to a sustainable path by reducing public sector spending instead of by increasing taxes.
The spending review framework sets out how the Treasury will require departments to submit their initial plans to deliver their priorities before Parliament’s summer recess and demonstrate that they meet a tough new set of criteria to deliver value for money.
The framework also sets out how there will be a period of external engagement between the government and all sectors of society and establishes a new “star chamber” to ensure that every department’s spending plans are challenged to ensure that they deliver more for less.
It also said that the spending review would take into account initial conclusions from the commission on long-term care, due to be set up shortly to examine the future funding of adult social care.
Osborne said: “This is the great national challenge of our generation: after years of waste, debt and irresponsibility, to get Britain to live within its means. It is a time to rethink how government spends our money.”