Autumn Statement 2015: who will win and who will lose?

Spending Review 2015: Osborne pledges £100bn for infrastructure projects

30 October

The government is to pledge £100bn of funding for infrastructure projects this parliament, as Chancellor George Osborne seeks to reclaim the political initiative at his long-awaited spending review next month.

After a chastening week in which his plans to cut £4bn from working tax credits were rebuffed in the Lords, and ahead of the set-piece announcement that has been heavily trailed in relation to brutal cuts to departmental spending, the chancellor is seeking to set out a more positive economic vision.

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In a speech today in York, Osborne will confirm the £100bn commitment and formally launch the infrastructure commission he announced to much fanfare at the Conservative conference last month.

It will be chaired by former Labour minister Lord Adonis and, it was revealed today, will comprise a seven-member expert panel featuring former deputy prime minister Lord Heseltine.

The commission "is designed to take some of the politics out of decisions on schemes of national importance", says the Financial Times.

The Guardian adds: "It will produce a report at the beginning of each parliament with recommendations for spending on infrastructure projects, though politicians will have the final say."

But attention will be on the big funding pledge – a huge figure in the context of the wider spending cuts. The government has said it will unveil a new package of asset sales that will "raise billions" towards the total.

Further money could be found if cuts in individual department budgets of up to 40 per cent produce aggregate savings of more than the predicted £20bn.

Osborne has often extolled the virtues of infrastructure investment, but beneath the rhetoric he has presided over a period of falling spending. In total, since he took office in 2010, there has been a 5.4 per cent drop in monies allocated to infrastructure projects.

The new commission will be given a remit covering three areas at first. It will be asked to identify priorities to boost transport infrastructure between northern cities and in London, and to examine how the UK can improve its energy security.

Osborne said a £15bn 'roads investment strategy' would also be funded in full.

Spending review 2015: state support for business to be cut

04 September

Business Secretary Sajid Javid has proposed cutting state support for businesses and increasing costs to students in his contribution to savings demanded across Whitehall by George Osborne.

Today ministers submit their initial modelling exercises for budget cuts of up to 40 per cent. That will mark the "start of negotiations about how the Government will slash £20bn" in spending, The Guardian says.

Osborne has already announced plans to cut £12bn from welfare and recoup £5bn in unpaid tax over the next four years as part of a plan to balance the books by the end of this parliament.

According to the Financial Times, Javid, "a small-state Thatcherite", is looking to "radically transform his department", which has an £18bn budget that "pays for universities, further education, skills and science, along with business support and innovation". As with all 'unprotected' departments – the exceptions being health, schools, overseas aid and defence, whose budgets are ringfenced – he must submit plans showing how he would cut his spending by 25 per cent and 40 per cent.

Javid may have to go even further, as O

sborne has given his department the bulk of the cost of increasing the number of apprenticeships and restricting working tax credits, which will be paid for through a rise in the minimum wage for most workers to more than £9 an hour.

Insiders have told the FT he is likely to have proposed turning grants offered to companies to boost activity in particular areas or sectors into loans. He could also extend the student loan regime into further education vocational courses and initiate a "sweeping reorganisation to save money at "partner organisations", such as the insolvency service and research councils.

In response, John Cridland, director-general of the CBI employers' organisation, warned against the "false economy" of cutting support for business innovation.

Elsewhere councils have said their budgets will be squeezed by cuts in central government funding across a range of areas, and demanded greater devolution to help them more efficiently allocate resources.

In an article for the Guardian, Gary Porter, chair of the Local Government Association, cited £10bn of extra cost pressures from changes such as the reduction in rent paid on social housing, as he called for the Government to hand over control of £60bn in spending.

Spending Review 2015: Network Rail not spared deep cuts

24 August

Network Rail, the publicly owned rail infrastructure monopoly, will not be spared the scythe in the upcoming spending review, with Whitehall mandarins asking it to model billions of pounds of cuts above and beyond those it is already targeting.

The Sunday Times reports the organisation, which had been an independent body until new European accounting rules brought it onto the public books again late last year, has been asked by the unprotected Department for Transport to prepare for cuts across its entire budget.

Next month, all departments except health and education are being asked to present for achieving cuts of 25 per cent and 40 per cent, with the actual figure to be agreed in negotiations with George Osborne.

Network Rail is already targeting a cut of 20 per cent from its £38.5bn budget over a five-year "control period" running to 2019. An extra five per cent from the remaining £30bn would equate to £1.5bn of extra savings, while the maximum figure - 40 per cent of the current budget – would result in fresh cuts of £7.7bn.

The Government has "highlighted areas such as pay and bonuses as potential targets", while cuts at the higher end of the projection could result in "drastic reductions in upgrades, pay, materials and even maintenance".

Network Rail has endured a difficult relationship with the Department for Transport after it suffered major service disruption at major London terminus stations in December and January and as it has fallen behind on major projects. In June Transport Secretary Patrick McLoughlin postponed several electrification upgrades in the north and sacked the organisation's chairman Richard Parry-Jones.

The demand could also "set the Treasury on a collision course with the independent regulator, the Office of Rail and Road", which since 1993 has set a budget for Network Rail and its predecessor Railtrack that is "protected by law".

News of the latest cuts target comes after figures revealed an improving picture for the wider public finances. In July, the highest level of income tax revenues in 18 years yielded the first monthly budget surplus since 2012. The Daily Telegraph [3] says the Government took in £1.3bn more than it borrowed and think-tank Capital Economics now believes it will undershoot its annual borrowing target.

Spending review 2015: Government borrowing at seven-year low

22 July

UK government borrowing hit a seven-year low for the month in June and was at its lowest for the first quarter of the financial year since the 2008 credit crunch, as a record income and corporation tax take bolstered Treasury coffers.

However, the figures still undershot economists' predictions and suggested that the annual borrowing target set in this month's Budget may be narrowly missed – highlighting the scale of the challenge facing the Chancellor as he tries to improve the public finances.

The Guardian reports that data from the Office for National Statistics show that government borrowing was £9.4bn in June, down £800m on a year earlier but above expectations of £8.5bn. Over the three months from April the total was £20.1bn, down 20 per cent year on year and the lowest since 2008-09.

This was the result of record monthly revenues from income tax and corporation tax, which rose to £11.5bn and £1.7bn respectively. The Times says that VAT receipts also rose by seven per cent to £10.9bn.

In his second Budget of the year two weeks ago, George Osborne projected that borrowing would fall to £69.5bn for the 2015-16 financial year. Speaking to the BBC, Howard Archer, chief UK and European economist at IHS Global Insight, said the latest figures would imply borrowing of £70.9bn for the year as a whole.

Overall government debt reached £1.513 trillion, its highest ever level. That is equivalent to 81.5 per cent of economic output, up from 80.8 per cent in May.

The news comes after Osborne outlined the scope of the latest government spending review yesterday. The Financial Times reports that he asked non-protected departments to model cuts of 25 per cent and 40 per cent, with a focus expected to fall on land and asset sales.

Spending review 2015: search for £20bn cuts begins

21 July

In a drive to save £20bn from government departmental spending, George Osborne will today order ministers to plot 'bold and imaginative' plans and set out sales of assets and land with the aim of cutting the deficit.

The BBC says the results of the spending review will be announced on 25 November, with ministers being asked to submit proposals by September. It comes after the summer budget earlier this month, which outlined £37bn worth of cuts and detailed where £17bn would be found, with £12bn coming from welfare savings and £5bn in tackling tax avoidance, evasion and imbalances.

Departments are unlikely to be hit with prescriptive targets as they were in the 2010 spending review under the coalition, but it states that those who engage with the Treasury "will have more control" over where the cuts are made.

According to The Guardian Treasury Chief Secretary Greg Hands will write to ministers asking them to identify savings over the next four years, with a focus on asset and land sales to raise capital and reduce running costs.

The review points out that the last administration reduced its estate by two million square metres, generating £800m in savings on running costs and raising more than £1.7bn. The government still owns more than £300bn worth of land and buildings.

The chancellor is expected to make the case for the cuts by arguing that the coalition saved £98bn over five years at a time when public service delivery has improved in key areas, with crime falling, NHS satisfaction at record levels and the number of pupils at good or outstanding schools up by one million. The BBC says he will add that no year "will see cuts as deep" as those in 2011-12 and 2012-13.

Before the election, the Conservatives had intimated that cuts to departmental budgets would amount to £13bn, but the chancellor has since set out a range of plans to increase spending in areas such as health. The Financial Times adds that proceeds from asset sales will be used to fund 150,000 new homes by 2020.

Under current plans the deficit, which the Daily Telegraph notes stands at close to £70bn for this year, will be eliminated by 2019-2020. Osborne then plans to run the "biggest structural budget surplus for more than 40 years".