21 Oct 2010

UK announces £81bn in spending cuts

6:08 am on 21 October 2010

Britain's coalition government has announced what it says are the biggest public spending cuts since World War II, with welfare, councils and police budgets all hit.

Chancellor George Osborne told Parliament that the £81 billion savings were essential to drag Britain back from the economic brink.

Many government departments will lose a quarter of their budgets and the government estimates nearly 500,000 public sector jobs will be lost, the BBC reports.

A planned rise in the state pension age for men and women to 66 will start in 2020, six years earlier than planned.

The main new welfare savings come from abolishing Employment and Support Allowance for some claimants after one year, raising £2 billion.

Central government funding for police will be cut by 20% over four years.

The Foreign Office will have a 24% budget cut through reduction in the number of Whitehall-based diplomats and back office costs and the Justice sector will have a 6% cut, with 3,000 fewer prison places in four years time.

Local councils are also in the firing line, with the amount of money they receive from government cut by 7.1% from April.

The Queen has not been spared in the drastic budget cuts, the ABC reports.

Mr Osborne said the Royal Family had agreed to a 14% drop in household spending in 2012-2013, while grants for official travel and palace repairs would be frozen.