Find 6% cuts to slash spending by another £3.5billion, ministers told

MINISTERS were last night ordered to draw up plans for a fresh round of spending cuts of up to 6 per cent as Chancellor Philip Hammond prepares for next week’s Budget.

Treasury Chief Secretary David Gauke wrote to departmental chiefs as part of measures to slash a further £3.5billion a year from public spending.

Britain’s foreign aid budget will be exempt, as will the NHS and schools. The target of spending two per cent of GDP on defence will also be maintained.

All other departments have been asked to come up with proposals to reduce budgets by between 3 and 6 per cent.

The cuts will come into place in 2019/20, four years after George Osborne promised the huge budget deficit left by Labour would be eradicated.

Announcing the ‘efficiency review’, Mr Gauke said: ‘There has been progress, but there is further to go and the whole of government is working together to consider how we can live within our means while delivering maximum value for every pound of taxpayer money.’

The decision to press ahead with the latest cuts signals the determination of his successor Mr Hammond to tackle the deficit. It comes despite booming tax receipts which have put the Chancellor on course to beat the deficit target of £68billion when he delivers his Budget next week.

But Government sources say Mr Hammond remains concerned that the size of Britain’s deficit is unsustainable and needs to be brought down as quickly as possible. Despite strong economic growth, he is also said to remain nervous about the potential impact of Brexit on the economy.

Labour MP Louise Haigh condemned the decision to press ahead with the cuts last night, saying ministers were ‘ prepared to sacrifice the country and economy to their ideology’.