Scotland braced for cuts as Treasury slashes £1bn

The Treasury will make cuts to six more government departments, which will affect the devolved Scottish equivalents. Picture: PA

• Major budget cuts announced by Treasury as six more departments agree to combined 8 per cent reduction for 2015/16 budgets

• Home Office, DEFRA, Department for Culture Media and Sport, Scotland Office, Wales Office and the Law Officers Department departments affected by latest round of cost-cutting

• Savings total has now reached £3.6 billion, around a third of the way towards £11.5 billion target

But last night Treasury officials insisted that the Scottish budget will be spared the full 8 per cent decrease announced for the UK departments because the big spending areas of health and schools will be protected.

The six Whitehall departments include the Home Office, Department for Environment Food and Rural Affairs and the Department for Culture, Media and Sport, which mostly cover areas devolved to Scotland, meaning there will be an equivalent reduction in the Scottish Government budget.

The other three departments are the Scotland Office, Wales Office and the Law Officers Department, which will all have their budgets slashed.

The overall savings of £1.1bn will contribute towards the £11.5bn savings target announced at Budget 2013.

Taken with the near-£1.5bn savings delivered at the Budget and £1bn of savings delivered in the first phase of settlements, which saw seven other departments agree reductions of around 10 per cent, it brings total savings to £3.6bn, nearly a third of the way towards the £11.5bn target.

But after the recent killing of a British soldier in Woolwich, London, and continued concerns over the threat of terrorism, the security services and counter-terrorist activities in the Home Office will be protected.

Liberal Democrat Chief Secretary to the Treasury Danny Alexander said: “These provisional settlements show we continue to make real progress towards the savings we need, while protecting priority areas. None of the spending choices we make are easy, but ensuring the UK can pay its way in the world is vital to our long-term prosperity.”

The Treasury would not specify the cuts to each department and the impact on Scotland, saying that full details will be provided when the spending review is unveiled in two weeks.

However, a Treasury spokesman said: “The Scotland Office budget only makes up a tiny amount of the overall amount and because health and schools budgets in England will be protected, it means that the equivalent amount of the Scottish budget will also be ringfenced.”

But SNP Treasury spokesman Stewart Hosie said that Scotland should brace itself for more damaging cuts. “Scotland’s budget will be slashed even further without any consideration of what the Scottish economy needs.”

Labour’s shadow financial secretary to the Treasury, Chris Leslie, said Chancellor George Osborne had been “forced to ask for more cuts” because of his “total failure on living standards and growth”. He said: “Far from balancing the books, the deficit is now set to be over £90bn in 2015.”