The impact of spending cuts could be spread more evenly over the next few years as part of Treasury plans to “reprofile” budget reductions, according to the Financial Times (FT).
Senior Whitehall officials are reported to have told the FT that some of the bigger savings have been delayed until later in the parliamentary term after ministers took into account financial penalties for ditching contracts and redundancy costs.
A decision to delay spending cuts could prove difficult to present, officials conceded, after the coalition government’s pledges to reduce the deficit and maintain the confidence of financial markets.
Labour would be expected to accuse David Cameron of backtracking on his previous policy and delayed cuts would also give Ed Miliband’s party political ammunition near to the next general election.
No decision has, as yet, been taken on the spending cuts “reprofiling”, with an aide to chancellor George Osborne telling the FT that spending review spreadsheets did not include any such delays.
But he emphasised that the schedule for spending cuts as proposed in June’s emergency Budget could not be guaranteed as ministers needed to consider contracts and redundancy costs.
According to the Treasury, the coalition government’s aim of getting rid of the current structural deficit within a parliament remains.
However, officials would not confirm that 20 October’s spending review would keep planned spending cuts of £23bn in 2011-12, rising to £83bn a year by 2014-15.