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Public Expenditure Cuts

Volume 976: debated on Tuesday 18 December 1979

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asked the Chancellor of Exchequer what proportion of public expenditure cuts for the years 1979–80 and 1980–81 will result from (a) increased efficiency, (b) reduced provision of goods or services and (c) increased charges to the public, respectively.

[pursuant to his reply, 17 December 1979]: In his Budget Statement my right hon. and learned Friend the Chancellor of the Exchequer announced specific cuts of£1,468 million in programmed expenditure in 1979–80. Of this total about£600 million was attributable to reduced procurement of goods and services and£27 million to increased prescription and dental charges. The remainder was attributed to reduced transfer payments and net lending. In addition, he referred to the estimated receipts of£1,000 million from sales of public assets and to the effects of the cash limit policy, expected to reduce the volume of planned programmes by a further£1,000 million in 1979–80. The squeeze on cash limits is resulting in a further reduction in the take-up of goods and services. Spending authorities are under pressure to make best use of the reduced resources available to them; but quantified estimates of such extra increases in efficiency are not available.Cmnd. 7746 announced the intention to stabilise public expenditure in 1980–81 at the level projected for 1979–80. Within this total, however, savings of some£240 million are expected to be made on school meals, milk and transport, but local authorities will decide the nature of and charges for these services. Net expenditure on the National Health Service will be reduced by a further£40 million by increasing prescription and dental charges from April 1980 and by increased recovery under the Road Traffic Act 1972 of the cost of treating the victims of road accidents.