Stop non-priority spending, Treasury warns ministers
Published On Dec 9, 2024, 6:52 PM
Chancellor Rachel Reeves is implementing a stringent budget review aimed at identifying and cutting inefficient government spending, requesting departments to save 5% of their budgets. The review will be zero-based, meaning all spending must be justified anew, focusing on delivering priorities set by the government. This initiative comes after criticisms of wasteful expenditures in the public sector. Notably, Reeves has stated that unnecessary programs, such as a costly initiative placing social workers in schools with no proven benefit, will be targeted for cuts. The Labour government aims for fiscal prudence while dealing with a £22 billion financial gap left by previous administrations.
Stock Forecasts
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The focus on cutting wasteful spending may stabilize public sector finances, which could lead to investor confidence in UK fiscal policy. However, potential cuts to services may prompt public discontent and affect sector institutions. Despite this, companies linked to public sector contracts, particularly efficient service providers may stand to gain from the reviews as they position themselves as solutions to efficiency improvements.
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