Comprehensive Spending Review 2010: Q&A

A quick introduction to the main issues behind today's all-important Spending Review announcement.

by Emma Haslett
Last Updated: 09 Oct 2013
What is a CSR?
The Comprehensive Spending Review was created by (then-Chancellor) Gordon Brown in 1997 as a regular process to allocate resources across the various Government departments - in other words, to establish how the Government was going to spend our money. The (eminently sensible) theory behind it is that departments would be able to get a bit more visibility, rather than budgets changing year-on-year. However, this year's Spending Review is particularly significant because of the extent of the cuts the Government is expected to make - over £80bn, at the upper end of estimates. That's so colossal that it could have massive implications for the political and social landscape in the UK.

Why do we need to cut?
The UK’s deficit in the financial year 2009-10 was £106,369,000,000 (or £106.4bn, if you prefer). That’s just over 13% of GDP – the highest of any of the major industrialised countries. And the ONS said today that the UK's net debt has ballooned £843bn. That means we're spending a small fortune every single day on interest payments - a cumulative £40bn+ a year.

Is there an alternatives to cuts?
If you accept that running a deficit like this isn't sustainable, there are only two ways of reducing it: generating extra tax revenue, or spending less. Politically, the only argument seems to be about what the mixture should be - and how quickly they should kick in. The Opposition believes that cutting too early will put the recovery at risk; the Coalition argues that there's no time to waste in getting that deficit down, so we can reassure the markets and stop shelling out so much cash on debt servicing.

How will it affect the private sector?
Much of the immediate pain will be felt by public sector employees, around half a million of whom could lose their jobs. But thousands of private sector firms that supply the public sector will be affected too - research by insolvency specialist Begbies Traynor last week showed that the cuts could put 50,000 businesses at risk, while PwC reckon a similar number of jobs will ultimately be lost in the private sector too. And of course anyone who uses public services - i.e. pretty much all of us - will probably notice the difference.

Who decided where to make cuts?
The Government has given all its departments a say in how the cuts are meted out (although whether it listened is another question). The main strategy, though, was decided on by the ‘Star Chamber’ or the Public Expenditure Committee, which is made up of senior cabinet ministers.

Where can I find out more?
The Guardian has an infographic which maps everything from the size of the public sector to how much is being spent on the NHS (and the all-important Chancellor phrases bingo board). Or if you feel you could do better than George Osborne, why not try it out on the Guardian’s clever ‘you make the cuts’ app?

The Treasury has its own introduction to the CSR – or if you want more detail, check out the BBC’s version. The Beeb will also be providing live video coverage from 11.30am, with Andrew Neil.

… and don’t forget to check out MT’s own live minute-by-minute coverage for the best commentary and analysis!

Emma Haslett recommends

CSR 2010 - Live

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