UK ministers warn budgets to be cuts again by 10%

UK MINISTERS have been warned that their budgets are set to be slashed again by 10 per cent as the government brings in a new round of austerity measures

A letter from Lib Dem Chief Treasury Secretary Danny Alexander to his cabinet colleagues has told them to find more savings for the 2015/16.

It is expected that schools and NHS spending will once again be protected which means that the funding to the Scottish Government will be protected from the full 10 per cent cuts.

International aid will also be protected from the cuts but the Ministry of Defence will not leading to a probable clash within the Cabinet.

Last month defence secretary Philip Hammond warned his department would struggle to take any more cuts, but it is now likely to get a one per cent real terms increase in its equipment budget and a five per cent reduction on the rest.

It would mean that Prime Minister David Cameron, who could be facing a leadership challenge from dissatisfied backbenchers, will be forced to go back on a promise to increase the defence budget year on year after 2015.

The cuts come as the governm,ent has been forced to borrow more because of a lack of growth in the economy.

Last week in his Budget Chancellor Geroge Osborne had to put his debt payment target back to 2017/18 a two year delay in his original plans.

The delay alrmed the international credit rating agencies with Fitch putting the UK on negative watch. Standard and Poor have already downgraded the UK to AA+ from its prized triple A credit rating status.

Last night a Treasury spokesman said: “The chief secretary has today written to departments to set their planning assumptions for the 2015/16 spending round. Setting planning assumptions is a normal part of the spending round process. These are planning assumptions that allow flexibility, not final decisions.”

Labour, shadow Treasury minister Chris Leslie said: “David Cameron and George Osborne never wanted or expected this spending review to happen.”They said their plan would balance the books by the next election, but their failure to deliver economic growth means there is now set to be a deficit of over £90bn in 2015/16. That’s the reason why the Treasury is now looking for even more spending cuts and tax rises.”