By David Williams
4 November 2010
The next Budget will be delivered on March 23, 2011, Chancellor George Osborne revealed today.
He also suggested that he is looking to significantly reform the current departmental spending system.
Osborne made the surprise announcement this morning at an evidence session of the Commons Treasury select committee. MPs had pushed him to reveal the date after he argued the benefits of setting ‘clear dates, several months in advance’ of major fiscal events.
‘Put it in your diaries,’ he told the committee.
Later in the same session, he indicated that the 2011 Budget could involve tearing up the existing structure for Whitehall spending.
Under the current system, government spends in two ways: through Departmental Expenditure Limits and through Annually Managed Expenditure. DELs are allocations outlined in the Comprehensive Spending Review and amended in each year’s Budget, while AME is less strictly controlled and led by demand.
While the annual block grant to councils, for instance, comes out of DEL, automatic spending such as welfare payments and tax credits come out of AME.
Asked whether it would be difficult to achieve the level of savings in AME that are suggested in last month’s Comprehensive Spending Review, Osborne said: ‘I think that’s one of the big challenges facing the Treasury, the AME bill, because there has been no incentive on government departments to control those budgets.
‘We are looking at whether the framework of DEL and AME needs to be revisited – particularly the AME part of it.
‘This is a very large budget, probably half of government spending, which – although it’s called Annually Managed Expenditure – is not really managed.
‘So we are looking at a new framework. I hope to say more about that in the Budget on March 23.’
In a wide-ranging evidence session, Osborne also claimed that his Labour predecessors had done ‘a lot of work’ on raising VAT, and on the more controversial measure of imposing caps on Housing Benefit.
He also defended his decision to frontload cuts to local government grants, arguing that although it will be more painful for councils in the short term, back-loaded cuts would not be seen as ‘credible’.
The chancellor twice claimed that cutting quangos would help save money, despite Cabinet Office minister Francis Maude claiming this week that the primary aim of the cull was to make decision-making more accountable.
