Pensions and public sector in firing line 'to save taxpayer £50bn'

DRASTIC plans to solve the UK's debt crisis by saving £50 billion from public spending per year have been outlined by the Institute of Directors and the Taxpayers' Alliance.

A freeze on the state pension, abolition of the government's controversial identity card scheme and a 10 per cent cut in "non-frontline" staff in the NHS and schools have been suggested as methods of tackling the UK's debt crisis.

The report published today outlines 34 specific measures that the groups believe would save a total of 50 billion and turn round the "dire state" of public finances.

They call for the reduction or removal of "unproductive" items of government expenditure which do not work or are not essential.

Suggestions include switching spending on free bus passes for the elderly and disabled to those who "genuinely" need it; a one-year freeze on the state pension; a one-year pay freeze across the public sector; the abolition of child benefit and the child trust fund while increasing child tax credits; and the abolition of free TV licences.

There was also a call for a 10 per cent reduction in the size of the civil service, which it was claimed would save 1.2 billion, and a similar reduction in non-frontline staff in the NHS and schools – saving 921 million.

The groups also suggested a one-year freeze of the grants given to Scotland, Northern Ireland and Wales – a step that they predicted would save 1.4 billion.

That suggestion did not go down well with the SNP, which is already claiming UK government cuts will result in a 500 million budget shortfall over the next year with the same sum to be cut the year after.

MP Stewart Hosie, the SNP Treasury spokesman, said: "This report shows how little the Taxpayers' Alliance know about Scotland – the Scottish Government's budget is already being cut for the coming year with more reductions to come.

"What the UK government needs to do is to cut wasteful and unwanted programmes like spending billions on new nuclear weapons."

Miles Templeman, director general of the Institute of Directors, said: "The UK is in the middle of a government debt crisis and our report sets out tangible proposals to cut the deficit.

"Any cut in spending naturally has the potential for some pain, but our list shows that large sums can be saved without hurting vital services."

Matthew Elliott, chief executive of the Taxpayers' Alliance, said: "It is essential that public spending is reduced to re-balance the nation's finances. Taxpayers cannot afford to sustain the current rate of spending, and they want to see an end to their money being spent unwisely."

According to the groups, freezing the state pension would save 1.4 billion; the abolition of child benefit and the child trust fund would free-up 8.4 billion; scrapping identity cards would save 55 million; targeting free bus passes would generate an extra 438 million; and scrapping free TV licences would save 564 million.

CUTS FOR CONSIDERATION

SOME of the 34 proposals:

1 Abolish Building Schools for the Future 2.3bn

2 Halt further orders and upgrades for Eurofighter 740m

3 Abolish NHS National Programme for IT 1.2bn

4 Abolish ID cards 55m

5 Cut non-frontline staff in health and schools by 10 per cent 921m

6 Reduce size of civil service by 10 per cent 1.2bn

7 Cut 10 per cent from budgets of most non-ministerial departments 1.7bn

8 One-year freeze of grants given to Scotland, Northern Ireland and Wales 1.4bn

9 One-year freeze of the Basic State Pension and the Minimum Income Guarantee 1.4bn

10 One-year pay freeze across public sector, excluding armed forces serving in conflict zones 6.2bn

11 Increase employee contributions to all unfunded public-sector pension schemes by a third 2.5bn

12 Abolish Child Benefit and Child Trust Fund, and increase Child Element of Child Tax Credit 8.5bn