Feb. 2 (Bloomberg) -- Government departments aren’t properly prepared to slash budgets by almost a fifth by 2015, even though they hit their targets during the first year of Britain’s austerity program, the spending watchdog said.
The National Audit Office said ministries don’t fully understand the costs and risks involved and that “fundamental changes” will be required to achieve cuts of 19 percent planned by the Treasury. Spending was reduced by 2.3 percent, or 7.9 billion pounds ($12.5 billion), in the year through March 2010, with half of that achieved by providing fewer services.
“Most departments will need to cut their spending by much more over the next four years,” Amyas Morse, the head of the NAO, said in a statement in London today. “This will not be possible without their recognizing that short-term measures are not enough and that fundamental changes are needed.”
Chancellor of the Exchequer George Osborne is aiming to rid Britain of a budget deficit equal to 9 percent of gross domestic product by 2017. His 147 billion-pound austerity program will cost more than 700,000 government jobs. Critics including the opposition Labour Party say the scale of the squeeze is worsening Britain’s economic woes.
“Departments must look to deliver services in radically more efficient ways and not simply cut front-line services,” Margaret Hodge, a lawmaker from the Labour Party who also heads Parliament’s Public Accounts Committee, said in a statement.
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