Labour warns of public sector cuts

Labour leadership candidate Ed Balls called the spending cuts 'shortsighted'
12 April 2012

Hundreds of thousands of police, teachers and other frontline public sector workers face the axe, Labour has warned, after ministers were ordered to draw up plans for spending cuts of up to 40%.

The Treasury said Government departments were being asked to prepare "initial planning assumptions" as a starting point for negotiations in the autumn spending review.

Treasury sources insisted that departments would not actually have to implement cuts on that scale, but Labour accused ministers of "softening up" the public for big job losses.

Shadow education secretary Ed Balls said the first blow of the axe could fall as early as Monday with the review of the Government's Building Schools for the Future (BSF) programme.

He claimed that rebuilding projects at 750 schools, approved under the former Labour government, were set to be cancelled.

"That is private sector jobs that which are going to be lost now, as well as the new schools which aren't going to be rebuilt. It is very short-sighted," he told Sky News.

The Department for Education confirmed that there would be an announcement this week on the Building Schools for the Future programme.

The instruction to ministers to begin drawing up detailed plans for cuts of up to 40% is the latest step in preparing for what is set to be the toughest spending review since the Second World War.

In his emergency Budget last month, Chancellor George Osborne warned that departments faced cuts averaging 25% over the next four years - apart from health and overseas aid, whose budgets were ring-fenced. However he also indicated that defence and education would receive favourable treatment.

Mr Osborne has now instructed the Ministry of Defence and the Department for Education to draw up plans showing the impact that budget cuts of 10% and 20% would have. The rest of Whitehall was told to prepare plans for cuts of 25% and 40%.

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