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UK's Osborne asks govt departments to find 20b pounds of savings

George Osborne, U.K. chancellor of the exchequer, holds the dispatch box containing the first budget by a Tory-majority government in almost two decades, as he exits 11 Downing Street in London.

[LONDON] Government departments will be asked to identify public land that can be sold off for house building as part of plans to make 20 billion pounds of savings to public spending, British finance minister George Osborne will say on Tuesday.

Fresh from an election victory in May, Mr Osborne has already set out plans to cut 12 billion pounds from the welfare budget as he seeks to rebalance Britain's public finances.

Launching a spending review on Tuesday, the results of which will be published on November 25, Mr Osborne will say the government will have made savings of 98 billion pounds by 2015/16 but must continue to do "more for less" in public services.

"Over the last parliament the government delivered the reductions in public spending that it committed to and more than halved the budget deficit it inherited," Mr Osborne will say, according to extracts released by his office.

"But we are still borrowing 1 pound for every 10 pounds we spend and national debt remains at its highest level for 50 years. If we do not deal with this debt, we run risks with our economic security."

Over the past five years, central government has reduced the size of its estate by two million square metres, the Treasury said in a statement, generating 800 million pounds of savings in running costs and sales proceeds of more than 1.7 billion pounds.

The public sector still owns more than 300 billion pounds worth of land and buildings, with the Ministry of Defence alone owning around 1 per cent of all UK land.

The Treasury will write to ministers asking them to identify efficiencies and reforms for the next four years, with a particular focus on asset sales and disposing of public sector land to help meet a target of building at least 150,000 homes by 2020.