'Union of Ministers' rebel against yet more budget cuts

MoD has been told to find savings of five per cent

The MoD has been told to find savings of five per cent but this will be partially offset by an agreed one per cent rise in the defence equipment budget for the period (Getty Images)

Government departments have been told by the Treasury to come up with plans to slash their budgets by a further 10 per cent in a single year as part of the Coalition’s latest austerity drive.

Danny Alexander, Chief Secretary to the Treasury, wrote to all of his cabinet colleagues setting out the cuts they could be expected to make as part of the Government’s spending review for 2015-16. While the NHS, schools and international development spending will not be cut, every other department, apart from the Ministry of Defence, has been told to save the equivalent of 10 per cent of current spending.

The MoD has been told to find savings of five per cent but this will be partially offset by an agreed one per cent rise in the defence equipment budget for the period.

Treasury sources stressed that the letters were the “start of the negotiating process” and that the final level of cuts was ultimately likely to be lower. However, the scale of the desired reductions in departments such as the Home Office, Local Government and Business will still infuriate ministers.

Home Secretary Theresa May, Communities Secretary Eric Pickles and Justice Secretary Chris Grayling are among a group in the Cabinet dubbed “the National Union of Ministers” who oppose further cuts in their departments. They privately warn there is simply “not the fat left to cut” after the 2010 spending review which saw unprotected departments face average cuts of 20 per cent over four years. The reductions are likely to impact more severely on court services and council spending, as well as the armed forces.

Business Secretary Vince Cable has warned that further cuts to his department could impede chances of economic growth. “We have now got to the point where further significant cuts will do enormous damage to the things that really do matter, like science, skills, innovation and universities,” he said.

In a separate announcement, nearly half of households face a council tax rise of up to 7.6 per cent. The average rise increase across England will be less than one per cent. However, more than 140 authorities have turned down a Government offer to freeze their council tax and have opted instead to charge householders more.

Government figures showed that the average Band-D council tax will be £1,456 in 2013-14, a rise of 0.8 per cent. The average will be £1,302 in London, £1,421 in metropolitan areas, £1,486 in unitary authority areas and £1,510 in shire districts.

Councils imposing the highest rises for 2013-14 are Breckland in Norfolk (7.6 per cent), North Dorset (4.8 per cent), East Lindsey in Lincolnshire (4.4 per cent), South Cambridgeshire (4.3 per cent), and Exeter (4 per cent).

The largest bills to be landing on Band-D doorsteps will be in Rutland (£1,701), Hartlepool (£1,686), Kingston upon Thames (£1,683), Newark & Sherwood (£1,657), and Central Bedfordshire (£1,652).