Bloomberg News

Osborne Budget Cuts Attacked by U.K. Commons Spending Watchdog

March 07, 2013

U.K. government spending cuts have focused excessively on easy-to-achieve savings without giving enough consideration to their economic impact, Parliament’s budget watchdog said.

Chancellor of the Exchequer George Osborne’s Treasury drove through cuts without having enough information on their effect, leaving departments to focus on protecting their own budgets, the Public Accounts Committee of the House of Commons said in a report published in London today.

“The government does not fully understand the impact of the spending cuts it is making,” opposition Labour Party lawmaker Margaret Hodge, who heads the panel, said in an e- mailed statement. “It is focusing on short-term priorities rather than the longer-term view.”

Osborne is facing pressure to ease the pace of his fiscal- consolidation plans in his March 20 annual budget as the economy enters its third straight year of stagnation. The report, signed off by members of Osborne’s Conservative Party including Stewart Jackson, who has openly questioned the government’s competence, was dismissed by the Treasury.

The committee is choosing headlines over facts, said an official at the Treasury who declined to be named in line with government practice. Spending plans have followed the path set out in 2010 when the cuts were first announced, the official said.

Osborne’s plans concentrated “on what could be cut quickly,” reducing the capital budget by almost half over five years and “undermining the government’s objectives of securing jobs and economic growth,” the watchdog said. It said officials should do more to inform ministers about the impact of cuts and provide them with alternatives.

To contact the reporter on this story: Gonzalo Vina in London at gvina@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net


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