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Last Updated: Thursday, 13 July 2006, 13:27 GMT 14:27 UK
Brown to slash Whitehall budgets
Surgeons performing an operation
Whitehall savings will go into frontline services, says Mr Brown
Gordon Brown has unveiled plans to reduce Whitehall budgets by up to 20% in real terms over the next five years.

The Treasury, HM Revenue and Customs, the Department of Work and Pensions and the Cabinet Office had all agreed to such a cut, the chancellor told MPs.

Home Office spending will be frozen and other departments must make efficiency savings of 2.5%. He said 30bn of assets would be sold off by 2010.

The cuts announced are on top of 21bn identified by 2004's Gershon Review.

"Administrative budgets which have already been frozen will now be cut not only in real terms but in cash terms, releasing extra resources for frontline services," Mr Brown said.

"These administrative savings make possible improvements in service within a Home Office budget which, as agreed, will have a flat real settlement, and settlements for the Treasury, DWP [Department for Work and Pensions], HMRC [HM Revenue and Customs] and Cabinet Office."

Chancellor Gordon Brown
We can ensure that we get the most resources to the frontline caring services, which are the priority for this government and I know are the priority for the people of Britain
Chancellor Gordon Brown

On job losses, Mr Brown told MPs: "We will reach the 80,000 figure by 2008."

However, David Tredinnick, the Conservative MP for Bosworth, asked why the chancellor had "chosen to put this out in a whimper ... at the end of Treasury questions".

Former Tory leader Michael Howard was also unhappy details were included as part of a response to a parliamentary question, rather than as a standalone announcement.

"Nothing could more vividly demonstrate the contempt which the chancellor has for this House [House of Commons] than the way in which he has sought to make what is in fact a statement in this underhand way."

He said it showed Mr Brown's "childish desire to avoid giving the financial spokesman of the opposition parties advance sight of what he was going to say".

'Priority for people'

Mr Brown replied that the government was "finding savings in administration", and "imposing" both efficiency savings and asset sales.

"The purpose of that is to release resources for frontline services," the chancellor said.

"We will bring forward further proposals for the next spending round so that we can ensure that we get the most resources to the frontline caring services, which are the priority for this government and I know are the priority for the people of Britain."

For the Lib Dems, treasury spokesman Vince Cable criticised Mr Brown's proposals on the way the savings would be spent.

He conceded some of the money would go to "admirable objectives like child poverty".

However, Mr Cable was unhappy about spending on "massive over-runs on the NHS IT scheme, on an ID card scheme costing 15bn, on acquiring sites for new nuclear power and on advance spending on the Trident missile".

Meanwhile, in advice to the Pay Review Bodies, Mr Brown called for a 2% cap on public sector pay rises to help keep inflation under control.

Watch Gordon Brown on Whitehall budgets

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Is Brown right to wield the axe?
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