By Richard Johnstone | 21 June 2012
Government spending cuts could last for a decade, the country’s most senior civil servant has revealed.
Sir Jeremy Heywood, who was appointed Cabinet secretary in December 2011, said yesterday that only a quarter of the coalition’s deficit reduction plan has so far been implemented.Speaking at the launch of the government’s reform plan for the civil service, he said: ‘We are 25% through fiscal adjustment. Spending cuts could last seven, eight, ten years.’
This meant spending constraint could last until 2020. Cuts were first made to in-year spending when the government came to power in 2010, and the Comprehensive Spending Review that year set out the spending plans for the four years from 2011/12 to 2014/15.
In last year’s Autumn Statement, Chancellor George Osborne confirmed that spending would be further cut by 0.9% in real terms in both 2015/16 and 2016/17.
Since then, the economy has re-entered recession, hitting the tax revenues that the government receives and leading to warnings that public sector spending could continue to be squeezed until the early 2020s.
Heywood’s comment is the first suggestion from government that austerity could continue beyond 2016/17. However, a Cabinet Office spokesman said: ‘The Cabinet secretary was talking at the launch of the Civil Service Reform Plan, and a key part of that is to ensure that the civil service continues to do better with less and adapt to the current financial climate.
‘He was talking very specifically about the shape and size of the civil service rather than spending in the wider economy.’
