Spending Review: £11.5 billion cuts announced

26 June 2013

Chancellor George Osborne's 2013 spending review – covering how much the government will spend across departments in 2015-16 – contained a series of budget cuts hitting local government, policing, transport and business, among other departments.

But perhaps the biggest losers were jobseekers, who will have a number of new conditions imposed on them following the spending review.

Jobseekers must now wait seven days before they can claim benefits – a measure some critics have suggested could force jobseekers to rely on payday lenders.

Just days after Wonga increased its typical APR to 5,853%, debt experts warn that more people could be forced to take out expensive short-term loans to cover the seven-day wait for benefits to kick in.

Jobseekers must also now proactively look for work, with a CV, before they can claim benefit, while single parents who qualify for nursery care must also start looking for work.

People who do not speak English must begin learning the language or they will lose their benefit entitlements.

Extensive cuts

In total, the government will spend £745 billion, but Osborne said it still had to make savings of £11.5 billion.

This will come from a series of cuts to departmental budgets, with most departments hit to some extent. Education is a notable exception, its spend rising to £53 billion, while the NHS budget in England has been protected.

But civil servants are to have the automatic pay rises they have always enjoyed scrapped, with future pay rises limited to an average of up to 1%. Osborne also said that 144,000 extra public sector jobs will be cut by 2015-16.

The government will stop making winter fuel payments to people living overseas, with a new temperature test introduced that checks the temperature of the region where recipients live. If it's too hot, they'll lose their payment.

Households will benefit from a two-year council tax freeze that will save around £100. The freeze was announced despite Osborne also announcing a 10% cut to local government budgets.

Osborne also promised that there will be a new cap on the amount of money the government spends on welfare, with a cash cap set every four years. He will also merge the government's health and social care budgets.

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