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Monday, 8th November 2010

UK: Quick Guide to the Spending Review

Quick Guide to the Spending Review
Source: Urban Forum (UK)

The Chancellor announced that cuts to public spending totalling £81bn over the next four years to achieve their target of eliminating the structural deficit1 by 2015. On average government departmentsí budgets have been reduced by 19% (less than the 25% that had been expected), making the cuts the biggest seen since 1973. However there is significant variation across budgets, ranging from a 51% cut at Communities and Local Government to an increase of 37% for international aid. Cuts of £7bn to the welfare budget were announced, on top of the £11bn announced in the emergency Budget in June.

The retirement age will rise to 66 from 2020, six years earlier than previously planned. And the government expects almost 500,000 jobs will be lost in the public sector as a result of the Spending Review. The impact of the cuts, according to the Treasuryís figures, will affect the poorest 10% of households more than any other group apart from the richest 10% of the population.

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