On this page you can download the Spending Review 2010 document; either in a complete PDF or individual chapters. Supplementary documents are also available for download below.

• An easy-to-browse version of the Spending Review 2010 document is available on this website

The Spending Review and supplementary documents are available in Adobe Acrobat Portable Document Format (PDF). If you do not have Adobe Acrobat installed on your computer you can download the software free of charge from the Adobe website. For alternative ways to read PDF documents and further information on website accessibility visit the HM Treasury accessibility page.

Spending Review document

• Spending Review 2010: complete document (PDF 2.1MB)
• Executive summary (PDF 281KB)
• Chapter 1: Overview (PDF 496KB)
• Chapter 2: Departmental settlements (PDF 697KB)
• Annex A: Statistical annex (PDF 429KB)
• Annex B: Distributional Impact Analysis (PDF 217KB)
• List of abbreviations (PDF 61KB)

Supplementary documents

• Spending Review 2010 policy costings
• Funding the Scottish Parliament, National Assembly for Wales and Northern Ireland Assembly: Statement of funding policy
• Overview of the impact of Spending Review 2010 on equalities
• Spending Review 2010: Distributional Impact Analysis – data sources

http://www.hm-treasury.gov.uk/spend_sr2010_documents.htm

The Chancellor of the Exchequer, the Rt Hon George Osborne MP

Downloand an .mp3 recording of the Chancellor's Spending Review statement (58MB)

Check against delivery

Mr Speaker.

Today’s the day when Britain steps back from the brink.

When we confront the bills from a decade of debt.

A day of rebuilding when we set out a four-year plan to put our public services and welfare state on a sustainable footing – for the long term.

So that they can do their job – providing for families, protecting the vulnerable and underpinning a competitive economy.

It is a hard road, but it leads to a better future.

We are going to bring the years of ever-rising borrowing to an end.

We are going to ensure, like every solvent household in the country:

• that what we buy, we can afford;
• that the bills we incur, we have the income to meet;
• and that we do not saddle our children with the interest on the interest on the interest of the debts we were not ourselves prepared to pay.

Tackling this budget deficit is unavoidable.

The decisions about how we do it are not.

There are choices. And today we make them.

Investment in the future rather than the bills of past failure. That is our choice.

We have chosen to spend on the country’s most important priorities – the health care of our people, the education of our young, our nation’s security and the infrastructure that supports our economic growth.

We have chosen to cut the waste and reform the welfare system that our country can no longer afford.

For this is the context of this Spending Review.

We have, at £109 billion pounds, the largest structural budget deficit in Europe.

This at a time when the whole world is concerned about high deficits, and our economic stability depends on allaying those concerns.

We are paying, at a rate of £120 million a day, £43 billion a year in debt interest.

This at a time when we all know that that money would far better serve the needs of own citizens than those of the foreign creditors we borrow from.

And we have inherited from the previous Government plans – if you can call them that – that envisaged our national debt ratio still rising in the year 2014.

Not a single penny of savings had been identified.

Indeed, they were plans that envisaged the Chancellor of the Exchequer standing here in 2014 presenting a spending review that still had years of cutting public spending ahead of it.

And that is why last year the IMF warned this country to accelerate the reduction in the deficit.

That is why the OECD, the Governor of the Bank of England, the CBI all agreed with them.

The action we have taken since May has taken Britain out of the financial danger zone:

• The immediate reductions to in-year spending to buy us a breathing space in the sovereign debt storm;
• The creation of an independent Office for Budget Responsibility to bring honesty back to official forecasts. 
• And I can confirm to the House that the OBR, and its new chair Robert Chote, have audited all of the annually managed expenditure savings in today’s statements.

The emergency Budget in June was the moment when fiscal credibility was restored.

Our market interest rates fell to near record lows.

Our country’s credit rating was affirmed.

The IMF went from issuing warnings to calling our Budget “essential”.

Now we must implement some of the key decisions required by that Budget.

To back down now and abandon our plans would be the road to economic ruin.

We will stick to the course.

We will secure our country’s stability.

We will not take Britain back to the brink of bankruptcy.

Mr Speaker, in the Budget I set out the tax increases we were prepared to make, including on capital gains at the higher rate, pension relief on the largest contributions and, for the first time, a permanent levy on banks.

We also had to increase VAT, where fortunately we were able to benefit from the preparatory work of the previous Government.

But I made it clear that spending reductions rather than tax rises needed to make up the bulk of the consolidation.

That is what the leading international evidence suggested worked best.

So I set out spending totals for the coming years, and announced some £11 billion of welfare savings that would help achieve them.

I also set out a new fiscal mandate for the public finances.

To eliminate the structural deficit by balancing the cyclically-adjusted current budget over five years, by 2015-16.

And we set a target of national debt falling as a proportion of national income by that same year.

We explained how, for reasons of caution, we will achieve both these objectives a year earlier in 2014-15.

I can confirm that the spending plans I set out today achieve a balanced structural current budget and falling national debt on that same timetable.

I can further confirm that the current spending totals I set out in the Budget for each of the next four years are the same as the current spending totals I set out today.

They have not changed.

Next year, current expenditure will be £651 billion, then £665 billion the year after, £679 billion the year after that, before reaching £693 billion in 2014-15.

The House will note that current spending is rising not falling over this period.

This is partly because, even with the measures we take today, debt interest payments continue to grow in these years.

Debt interest payments will reach £63 billion in 2014-15.

For it takes time to turn around the debt supertanker.

But I can now report to the House that against the plans we inherited, one of the departments which suffers the greatest cut today and at the steepest rate is the Department for Debt Interest.

Debt interest payments will be lower by £1 billion in 2012, then £1.8 billion in 2013 and £3 billion in 2014 – a total of £5 billion over the course of this Spending Review.

That is the equivalent to 16 new hospitals or the annual salaries of 100,000 teachers.

At the Budget I also set out my plans for capital spending over the next four years.

I can now tell the House that capital spending will be £51 billion next year, then £49 billion, then £46 billion, and £47 billion in 2014-15.

This is about £2 billion a year higher than I set out in the Budget.

Given the contractual obligations we inherited from the last Government, doing anything else would have meant cutting projects which would clearly enhance the economic infrastructure of this country.

And this has no direct impact on whether we meet the fiscal mandate or the year in which the debt ratio starts falling.

So total public expenditure – capital and current – over the coming years will be £702 billion next year, then £713 billion, £724 billion and £740 billion in 2014-15.

In real terms, public spending will be at the same level as in 2008.

Our public services and our welfare system will be put on a sustainable, long term footing.

And we will make sure that the financial catastrophe that happened under the previous Government never ever happens again.

Mr Speaker, let me turn now to the spending decisions and the three principles I propose to apply to the choices we have to make.

First, reform – that in every area where we make savings, we must leave no stone unturned in our search for waste and we must deliver changes necessary to make our public services fit for the modern age.

Second, fairness – that we are all in this together and all must make a contribution.

Fairness means creating a welfare system that helps the vulnerable, supports people into work, and is also affordable for the working families who pay for it from their taxes. 

Fairness also means that across the entire deficit reduction plan, those with the broadest shoulders should bear the greatest burden.  Those with the most should pay the most, including our banks.

Third, growth – that when money is short we should ruthlessly prioritise those areas of public spending which are most likely to support economic growth, including investments in our transport and green energy infrastructure, our science base and the skills and education of citizens.

Let me explain now how principles have guided our specific decisions.

First, Mr Speaker, reform.

I believe the public sector needs to change to support the aspirations and expectations of today’s population, rather than the aspirations and expectations of the 1950s.

So the Spending Review is underpinned by a far-reaching programme of public service reform.

We saw over the last decade that more money without reform was a recipe for failure.

Less money without reform would be worse.

And we are not prepared to accept that.

So we have begun by squeezing every last penny we can find out of waste and administration costs.

Our ambition in this review was to find £3 billion of savings from the administrative budgets of central government departments.

With the help of the Green Review, and the work done by my RHF the Minister for the Cabinet Office, I can tell the House that we have gone further than we thought possible in cutting back-office costs.

Quangos will be abolished.

Services will be integrated.

Assets will be sold.

And the administrative budgets of every main government department cut by a third.

The result is this.

We promised £3 billion of Whitehall savings, we will deliver £6 billion.

Of course, there is understandable concern about the reduction in the total public sector headcount that will result from the measures in the Spending Review.

We believe the best estimate remains the one set out by the independent Office for Budget Responsibility.

They have forecast a reduction in headcount of 490,000 over the Spending Review Period.

Let’s be clear. That’s over four years, not overnight.

Much of it will be achieved through natural turnover, by leaving posts unfilled as they become vacant.

Estimates suggest a turnover rate of over 8% in the public sector.

But yes, there will be some redundancies – up to the decisions of individual employers in the public sector – that is unavoidable when the country has run out of money.

We feel responsible for every individual who works for the Government, and we will always do everything we can to help them find alternative work.

In fact, in the last three months alone the economy created 178,000 jobs.

So we should remember that unless we deal with this record budget deficit decisively many more jobs will be in danger – in both the private and the public sector.

The Cabinet Office and the Treasury will oversee the programme of Whitehall savings.

Both departments will lead by example.

The core Cabinet Office budget will be reduced by £55 million by 2014-15.

Additional allocations will be provided to fund electoral reform, support the Big Society, establish community organisers and launch the pilots for the National Citizen Service – which will give young people for the first time a right of passage to citizenship.

In recognition of the challenges faced by the voluntary and community sector, I am establishing a one year £100 million transition fund to help those facing real hardship.

The Treasury will see its overall budget reduced by 33% – and we will share the department’s enormously expensive PFI building, that my predecessor-but-one signed up to, by moving part of the Cabinet Office into the same premises.

The Chancellor is also a Royal Trustee and I want to say something briefly about the Civil List.

As I outlined at the Budget, the ten year settlement expired this year and no provision for a new settlement had been made when we entered office.

Her Majesty graciously agreed to a one year cash freeze in the Civil List for next year.

Going forward, she has also agreed that total Royal Household spending will fall by 14% in 2012-13 while grants to the Household will be frozen in cash terms.

In order to support the costs of the historic Diamond Jubilee, which the whole country is looking forward to celebrating, there will be a temporary additional facility of £1 million.

After that the Royal Household will receive a new sovereign support grant linked to a portion of the revenue of the Crown Estate, so that my successors do not have to return to the issue so often.

Mr Speaker, central to this review is reshaping our public services.

First, there needs to be a dramatic shift in the balance of power from the central to the local. 

A policy of rising burdens, regulations, targets, assessments and guidance has undermined local democracy and stifled innovation.

We will completely reverse this.

We will give GPs power to buy local services, schools the freedom to reward good teachers, and communities the right to elect their police and crime commissioners.

Second, we should understand that all the services paid for by government do not have to be delivered by government.

We will expand the use of personal budgets for special education needs, children with disabilities and long term health conditions.

We will use new payment mechanisms for prisons, probation, and community health services.

And we will encourage new providers in adult social care, early years and road management.

For local government, the deficit we have inherited means an unavoidably challenging settlement.

There will be overall savings in funding to councils of 7.1% a year for four years.

But to help councils, we propose a massive devolution of financial control.

Today I can confirm that ring-fencing of all local government revenue grants will end from April next year. 

The only exception will be simplified schools grants and a public health grant.

Outside of schools, police and the fire service, the number of separate core grants that go to local authorities will be reduced from over 90 to fewer than 10.

Councils and their leaders will remain accountable – but they will no longer have to report on 4,700 local area agreement targets.

The Local Government settlement includes funding for next year’s council tax freeze, to help families when their budgets too are tight.

We are also introducing Tax Increment Finance powers, allowing councils to fund key projects by borrowing against future increases in locally collected business rates.

Some in local government have concerns about the financing of social care.

I can announce that grant funding for social care will be increased by an additional £1 billion by the fourth year of the Spending Review.

And a further £1 billion for social care will be provided through the NHS to support joint working with councils – so that elderly people do not continue to fall through the crack between two systems.

That’s a total of £2 billion additional funding for social care to protect the most vulnerable.

Mr Speaker, we will also reform our social housing system.

For it is currently failing to address the needs of the country.

Over ten years, more than half a million social rented properties were lost.

Waiting lists have shot up. 

Families have been unable to move.

And while a generation ago only one in ten families in social housing had no-one working, this had risen to one in three by 2008-09.

We will ensure that, in future, social housing is more flexible. 

The terms for existing social tenants and their rent levels will remain unchanged, new tenants will be offered intermediate rents at around 80% of the market rent.

Alongside £4.4 billion of capital resources, this will enable us to build up to 150,000 new affordable homes over the next four years.

We will continue to improve the existing housing stock through the Decent Homes programme.

And we will reform the planning system so we put local people in charge, reduce burdens on builders and encourage more homes to be built, with a New Homes Bonus scheme.

Within an overall resource budget for the Department for Communities and Local Government that is being reduced to £1.1 billion over the period, priority will be given to protecting the Disabled Facilities Grants.

This will go alongside a £6 billion commitment over four years to the Supporting People programme, which provides help with housing costs for thousands of the most vulnerable people in our communities.

And, in recognition of the important service provided by the Fire and Rescue Service, we have decided to limit their budget reductions in return for substantial operational reform.

Mr Speaker, let me turn now to reforms in our security and defence.

Yesterday my RHF the Prime Minister set out the conclusions of the Strategic and Defence Review.

He explained in detail how we will protect the British people, deliver on our international obligations and secure British influence around the world.

This Spending Review provides the resources to do just that.

The budget for the Ministry of Defence will reach £33.5 billion in 2014-15, a saving of 8% over the period.

On top of this settlement, we will continue to provide out of the Reserve the resources that our forces in Afghanistan require.

As a Chancellor I believe strongly that if we ask our brave service men and women to risk their lives on our behalf in active combat, then we will give them all the tools they need to finish the job.

But Mr Speaker, our international influence and our commitment to the world are not only determined by our military capabilities.

Our diplomacy and development policy matter too.

Savings of 24% in the Foreign and Commonwealth Office budget will be achieved over the review period by a sharp reduction in the number of Whitehall-based diplomats and back office functions.

There will be a focus on helping British companies win exports and secure jobs at home, and with the help of the UKTI we will attract significant overseas investment to our shores. 
 
I can also confirm that this Coalition Government will be the first British government in history, and the first major country in the world, to honour the United Nations commitment on international aid.

The Department for International Development’s budget will rise to £11.5 billion over the next four years.

Overseas development will reach 0.7% of national income in 2013. 

This will halve the number of deaths caused by malaria.

It will save the lives of 50,000 women in pregnancy and 250,000 newborn babies.

Whether working behind the counter of a charity shop, or volunteering abroad, or contributing taxes to our aid budget, Britons can hold their heads up high and say – even in these difficult times, we will honour the promise we make to the very poorest in our world.

Our aid budget allows Britain to lead in the world.

It may be protected from cuts but not from scrutiny.

I have agreed with my RHF the Development Secretary a plan of reform that reduces administration costs to half the global donor average, ends the aid programmes we inherited in China and Russia, focuses on conflict resolution, and creates an independent commission to assess the impact of the money we commit.

Mr Speaker, let me now turn to security at home.

Protecting the citizen is a primary duty of government.

Our police put themselves in harm’s way to make the rest of us safe – and we owe them our gratitude.

But no public service can be immune from reform.

Her Majesty’s Inspector of Constabulary found in his recent report that significant savings could be made to police budgets without affecting the quality of front line policing.

And Tom Winsor is leading a review of terms and conditions which will report on how the police service can manage its resources to serve the public even more cost-effectively.

Using independent forecasts for the precept, the settlement I am proposing today will see police spending falling by 4% each year.

By cutting costs and scrapping bureaucracy we are saving hundreds of thousands of man hours – our aim is to avoid any reduction in the visibility and availability of police in our streets.

Our new National Security Strategy judges terrorism to be one of the highest risks facing this country.

Therefore I am prioritising counter terrorism over the review period, both in the Home Office Budget and the Single Intelligence Account.

We have been assured this will maintain our operational capabilities against both Al Qaida and its affiliates and against Northern Irish terrorist threats.

This will enable us to meet the terrorist threat and protect the Olympic Games in 2012.

Overall, the Home Office budget will find savings of an average of 6% a year.

The Ministry of Justice’s budget will reach £7 billion by the end of the four year period – with average savings of 6% a year.

A Green Paper will set out proposals to reform sentencing, intervene earlier to give treatment to mentally ill offenders, and use voluntary and private providers to reduce reoffending.

£1.3 billion of capital will also be provided over the period to maintain the existing prison estate and fund essential new-build projects – but plans for a new fifteen hundred place prison will be deferred.

The Law Officers Department will reduce its budget by a total of 24% over the period, with the Crown Prosecution Service greatly reducing its inflated cost base.

Reforms will also be required to streamline the criminal justice system, close under-used courts and reduce the legal aid bill.

We need fair access to justice, but provided at a fair cost for the taxpayer.

Mr Speaker, all the reforms I have spoken of – to Whitehall and the way services are provided, to local government, to our defence and security and justice system – will improve both the value for money for taxpayers and the service provided to the public.

Next month, each government department will publish a business plan setting out its reform plans for the next four years – so their priorities are clear and the public can hold them to account.

Reform is one of the guiding principles of this Spending Review.

So too is fairness.

Let’s be clear.

There is nothing fair about running huge budget deficits, and burdening future generations with the debts we ourselves are not prepared to pay.

How ironic that it was the last Labour Prime Minister himself who once observed that the “public finances must be sustainable over the long term. If they are not then it is the poor ... that will suffer most.

That’s why we are restoring order to our public finances before that is allowed to happen.

A fair government deals with the deficit decisively.

That is what we are doing today.

And a fair government makes sure that those with the broadest shoulders bear the greatest burden.

The distributional analysis published today shows that those on the highest incomes will contribute more towards this entire fiscal consolidation, not just in cash terms, but also as a proportion of their income and consumption of public services combined.

Mr Speaker, I completely understand the public’s anger that the banks that were so appalling regulated over the last decade, and whose near collapse wrought such damage on the economy, should now be contemplating paying high bonuses.

We are overhauling the system of regulation we inherited so that the Bank of England, with its clout and reputation, is put in charge.

We have set up the Independent Commission on Banking to look at the structure of the industry – and next year we will receive its report.

And today we set out very clearly, for all to take note of, our objective in taxing the banking industry going forward.

We neither want to let banks off making their fair contribution, nor do we want to drive them abroad. 

Many hundreds of thousands of jobs across the whole United Kingdom depend on Britain being a competitive place for financial services.

Our aim will be to extract the maximum sustainable tax revenues from financial services.

We will assess what those maximum revenues could be – not just in one year, but over a period of years.

We have already decided – in the face of opposition from the previous government – to introduce a permanent levy on banks.

The legislation will be published tomorrow.

Once fully effective, the permanent levy will raise more net each year and every year for the Exchequer than the one-year bonus tax did last year – and I note that the previous Chancellor now admits that it failed to curb behaviour and was not sustainable.

However, that is not enough.

We want the banks to pay not just by the letter of the tax law, but by its spirit.

A year ago, the previous government announced in a fanfare that it would require banks to sign up by the Code of Practice on Taxation.

Mr Speaker, I have asked the Revenue how many of our leading 15 banks actually signed up.

The answer is four.  Four out of fifteen.

That’s what happened when they were in office. All talk and no action.

So I have instructed the Revenue to work with the banking sector to ensure the remaining banks have implemented the Code of Practice by the end of next month.

We will also need to address the situation under the last government where the gap between the taxes owed and the taxes paid grew considerably.

So in this Spending Review, while the HM Revenue and Customs budget will be expected to find resource savings of 15% through the better use of new technology, greater efficiency and better IT contracts – we will be spending £900 million more on targeting tax evasion and fraud.

This additional £900 million is expected to help us collect a missing £7 billion in tax revenues.

Nor will fraud in the welfare system be tolerated anymore.

We estimate that £5 billion is being lost this way each year. 

£5 billion that others have to work long hours to pay in their taxes.

This week we published our plans to step up the fight to catch benefit cheats, and to deploy uncompromising penalties when they are.

That brings me to the wider welfare budget.

A civilised country provides for families, protects the most vulnerable, helps those who look for work, and supports those in retirement.

That is why one of the first acts of this coalition government was to re-link the basic state pension to earnings, and guarantee a rise each year by earnings, inflation or 2.5% – whichever was higher.

Never again will those who worked hard all their lives be insulted with a state pension increase of just 75 pence.

But this guarantee of a decent income in retirement has to be paid for at a time when people are living much longer than anyone predicted.

We should celebrate that fact, but also confront it.

Lord Turner’s Report on pensions, commissioned by the last government, acknowledged that a more generous state pension had to be funded by an increase in the pension age.

Even since its publication, life expectancy has risen further than it predicted.

Before the summer we launched a review on increasing the state pension age, and that has now concluded. 

As a result, I can today announce that the state pension age for men and women will reach 66 by the year 2020.

This will involve a gradual increase in the State Pension Age from 65 to 66, starting in 2018. 

And it will mean an acceleration of the increase in the female pension age already underway since this April.

From 2016 the rate of increase will be three months in every four rather than the current plan of one month in every two.

Raising the State Pension Age is what many countries are now doing, and will by the end of the next Parliament save over £5 billion a year – money which will be used to provide a more generous basic state pension as we manage demographic pressures.

Earlier this month, we also received the interim report from John Hutton’s Public Service Pension Commission.

I am sure the whole House will want to thank John for this excellent and independent piece of work.

I welcome his findings – and I hope it will form the basis of a new deal, that balances the legitimate expectations of hard working public servants for a decent income in retirement with the equally legitimate demands of hard-working taxpayers that they do not pay unfairly for it.

The elements of this new pension deal are clear.

We should accept that public service pensions continue to provide a form of defined benefit, and that there is no race to bottom of pension provision.

We want public service pensions to be a gold standard.

At the same time, we should accept that they must be affordable. 

When these public service pension schemes were established in the 1950s, taxpayers made half the contributions. 

Today they make up two-thirds of contributions, and the unfunded bill is set to rise to £33 billion by 2015-16.

So I think we should accept, as John Hutton does, that there has to be an increase in employee contributions, although I also agree with John that this should be staggered and progressive.

That means the lower paid – and those in the armed forces – are protected and the highest paid public servants, who get the largest benefits, pay the highest contributions.

We will await the full Commission Report next spring before coming to any conclusions on the exact nature of the defined benefit and progressive contribution rise.

We will also launch a consultation on the Fair Deal policy.

But we will carry out, as the interim report suggests, a full public consultation now on the appropriate discount rate used to set contributions to these pensions.

From the perspective of filling the hole in the public finances, we will seek changes that deliver an additional £1.8 billion of savings per year in the cost of public service pensions by 2014-15 – over and above the plans left to us by the last government.

It is also clear that the current final-salary pension terms for MPs are not sustainable and we anticipate that the current scheme will have to end.

We will make a further statement following the publication of Lord Huttons’ findings.

The welfare system is also there to help people of a working age when they lose their job, have a disability, start a family and need help with low pay.

But the truth – as everyone knows – is that the welfare system is failing many millions of our fellow citizens.

People find themselves trapped in an incomprehensible out-of-work benefit system for their entire lifetimes, because it simply does not pay to work.

This robs them of their aspirations and opportunities.

And it costs the rest of the country a fortune.

Welfare spending now accounts for one third of all public spending.

Benefit bills have soared by 45% under the previous government.

In some cases, the benefit bill of a single out-of-work family have amounted to the tax bills of 16 working families put together.

This is totally unsustainable and unfair.

The last government promised reform and flunked it.

We will deliver.

My RHF the Work and Pensions Secretary is setting out proposals, with my support, to replace all working age benefits and tax credits with a single, simple Universal Credit.

The guiding rule will be this: it will always pay to work.

Those who get work will be better off than those who don’t.

It represents the greatest reform to our welfare state for a generation 

It will be introduced over the next two Parliaments, at a pace that ensures we get this right.

I have set aside more than £2 billion over this spending review of resources to make this happen.

And it will go alongside our new Work Programme, which we are also funding today.

Drawing on the skills of the voluntary sector and private providers, the Work Programme will provide intensive help to those looking for work – and support for those who could look for work but currently lack the confidence or skills to try.

The Department for Work and Pensions will make savings to help deliver these schemes, by increasing the use of digital applications and reducing overheads.

We will also be seeking substantial savings from the rest of the £200 billion benefit bill, on top of those already identified in the Budget.

As I said in June, the more we could save on welfare costs – the more we can continue other, more productive areas of government spending.

And in the massive public consultation we conducted over the summer, the overwhelming message we received was that the British people think it is fair to reform welfare bills in order to protect important public services.

So today I announce these further welfare savings.

We will time limit contributory Employment and Support Allowance for those in the Work Related Activity Group to one year.

This is double the length of time than for contributory Jobseeker’s Allowance.

We will increase the age threshold for the shared room rate in housing benefit from 25 to 35, so that housing benefit rules reflect the housing expectations of people of a similar age not on benefits.

We will give local authorities greater flexibility to manage council tax together with direct control over Council Tax benefit, within an overall budget that will be reduced by 10% from April 2013.

We will align the rules for the mobility and care elements of Disability Living Allowance paid to people in residential care, generating savings but enabling us to continue with this important benefit.

We will freeze the maximum Savings Credit award in Pension Credit for four years, thereby limiting the spread of means-testing up the income distribution.

On tax credits:

We will further control the cost of tax credits by freezing the basic and 30 hour elements for three years;

We will change the Working Tax Credit eligibility rules so that couples with children must work 24 hours per week between them;

And we will return the childcare element of the Working Tax Credit to its previous 70% level.

We will also introduce a new cap on benefits.

No family that doesn’t work will receive more in benefits than the average family that does go out to work.

That is a tough, but fair deal.

Of course, those in receipt of Disability Living Allowance, Working Tax Credit or the War Widows Pension will be excluded.

Taken together, all these welfare measures I have outlined will save the country £7 billion a year.

But Mr Speaker, we want to ensure that low income families with children are protected from the adverse effect from these essential savings.

Because this Government is committed to ending child poverty.

I can announce today that I am increasing the child element of the Child Tax Credit by a further £30 in 2011-12 and £50 in 2012-13 above indexation.

This will mean annual increases of £180 and then £110 above the level promised by the last government.

This will provide support to 4 million lower income families – and I can confirm that using the same model we inherited, the Spending Review has no measurable impact on child poverty over the next two years.

While we await the conclusions from the report by the RHM for Birkenhead.

Let me turn now to the universal benefits.

Mr Speaker, I have taken the difficult decision to remove child benefit from families with a higher rate taxpayer.

I wish it were otherwise – but I simply cannot ask those watching this earning just £15,000 or £30,000 to go on paying the child benefit of those earning £50,000 or £100,000.

The debts of the last Labour Government, and the need to make sure the better off in society also make a fair contribution, make this choice unavoidable.

And it also means that no further changes to child benefit are required.

Child benefit will continue to paid in the normal way to the great majority of the population, from birth until a child leaves full time education at the age of 18 or even 19.

We can afford to do this because, according to the latest independent estimates from the Office for Budget Responsibility, removing child benefit from higher rate taxpayers saves Britain £2.5 billion a year.

We also keep the universal benefits for pensioners, in recognition of the fact many have worked hard and saved all their lives.

Free eye tests;

free prescription charges;

free bus passes;

free TV licenses for the over 75s;

and Winter Fuel Payments will remain exactly as budgeted for by the previous Government – as promised.

I am also turning the temporary increase in the Cold Weather Payments introduced by the last government into a permanent increase.

In my view higher Cold Weather Payments should be for life, not just for elections.

And so too are the promises we make on the National Health Service.

The NHS is an intrinsic part of the fabric of our country.

It is the embodiment of a fair society.

This Coalition Government made a commitment to protect the NHS, and increase health spending every year.

Today we honour that commitment in full.

Total health spending will rise each year over and above inflation.

This year we are spending £104 billion on health care, capital and current combined. 

By the end of four years, we will be spending £114 billion.

We can afford this in part because of the decisions on welfare I have just announced.

And also because we have made tough decisions in other parts of the government budget.

But to govern is to choose.  And we have chosen the NHS.

That does not mean we are letting the health department off the need to drive forward real reform and savings from waste and inefficiency.

Productivity in the health service fell steadily over the last ten years, and that must not continue.

By 2014, we are aiming to save up to £20 billion a year by demanding better value for money.

But the money we save will be reinvested in our nation’s health care.

As the independent forecasts we published in the Budget show, we need to make these savings to deal with our ageing population and the rising costs of new medical treatments.

But there are also new services we can offer.

A new cancer drug fund will be provided.

Spending on health research will be protected and we will prioritise work on treatment for dementia.

We will expand access to psychological therapies for the young, elderly and those with mental illness.

We will fund new hospital schemes, including the St Helier, the Royal Oldham and the West Cumberland.

For health spending, as for other spending announcements, there will be consequential allocations for Scotland, Wales and Northern Ireland.

The Barnett formula will be applied in the usual way.

That means that the increase in health spending and the relative protection of education spending will feed through to the devolved resource budgets.

It means that that all three nations will actually see cash rises in their budget, albeit rises below the rate of inflation.

For Scotland, the resource budget will rise to £25.4 billion in 2014-15.

For Wales, it will rise to £13.5 billion.

And for Northern Ireland, it will rise to £9.5 billion.

In Scotland, we are proceeding with the implementation of the Calman reforms.

In Wales, we will consider with the Assembly Government the proposals in the final Holtham report, consistent with the Calman work being taken forward in Scotland. 

In Northern Ireland, the collapse of the Presbyterian Mutual Society has caused great hardship.  And people have been left without their money for too long.

I confirm today that we will provide the Northern Ireland Executive with £25 million in cash, and a £175 million loan, to help those who have lost their life savings.  

We will also help those across the United Kingdom who have lost money as a result of the collapse of Equitable Life.

For ten years the Equitable Life policyholders have fought for justice.

For ten years the last government dithered and delayed and denied them that justice.

It is time to right the wrong to many many thousands of people, who did the right thing, who saved for their future, tried not to depend on the state – and then were innocent victims of a terrible failure of regulation.

So let me make it clear.

I accept the findings of the Parliamentary Ombudsman in full.

I have read the advice of Sir John Chadwick, and I thank him for it, but I do not agree with the level of compensation his analysis suggested.

I agree with the Ombudsman that the relative loss suffered is the difference between what policyholders actually received from their policies, and what they would have received elsewhere.

The Parliamentary Ombudsman herself recognised that a balance had to be struck between being fair to policyholders and fair to taxpayers, particularly when many budgets and benefits are being cut.

But money we pay out has to come from general public expenditure.

I have decided that the fair amount to pay out in total is in the region of £1.5 billion, two thirds of which will be found in this Spending Review period.

Those who had With Profits Annuities are particularly hard hit, as they were retired and were unable to move their savings elsewhere.  As a result, the Government will cover the cost of the total relative loss suffered by these deserving people.

The scheme will start making payments next year.

Mr Speaker, these measures and our welfare reforms mean:

• It will always pay to work;
• Benefit savings will help us protect key public services like the NHS;
• There is help for those who have saved and lost everything.

These are fair decisions, consistent with the second principle of this Spending Review.

The third and final principle centres on growth [and promoting a private sector recovery.

By restoring macroeconomic stability we have brought certainty to businesses.

By cutting business taxes we are giving business the freedom to compete.

And today’s review builds on these steps – because even when money is short we should prioritise those areas of public spending which are most likely to support economic growth.

That is what we are doing in the Department for Business, Innovation and Skills.

Administration will be cut by £400 million. 24 quangos will be cut.

Lower-priority programmes like Train to Gain will be abolished.

Adult learners and employers will have to contribute more to further education.

This means that today I can announce the largest ever financial investment in adult apprenticeships.

An increase of over 50% on the previous government, helping 75,000 new apprentices a year by the end of the Spending Review period.

We will maintain and invest in the Post Office Network, and protect community post offices. 

We will come forward with our detailed response to Lord Browne’s report on higher education funding and student finance, including our plans to provide financial support to encourage those from the poorest households stay in education.

Our universities are jewels in our economic crown, and it is clear that if we want to keep our place near the top of the world league tables then we need to reform our system of funding and reject – as, to be fair, many opposite do – the unworkable idea of a pure graduate tax.

Clearly better-off graduates will have to pay more – and this will enable us to reduce considerably the contribution that general taxpayers have to make to the education of those who will probably end up earning much more them.

Overall, average annual savings of 7.1% will be found from the Department for Business budget – the minimum it was asked to find.

Within those savings, however, the Secretary of State and I have decided to protect the science budget.

Britain is a world leader in scientific research.  And that is vital to our future economic success.

That is why I am proposing that we do not cut the cash going to the science budget.  It will be protected at £4.6 billion a year.

Building on the Wakeham Review of science spending, we have found that within the science budget significant savings of £324 million can be found through efficiency.

If these are implemented, then with this relatively protected settlement I am confident that our country’s scientific output can increase over the next four years.

We will also:

• invest £220 million in the UK centre for Medical Research and Innovation at St Pancras;
• fund the molecular biology lab in Cambridge;
• the Animal Health Institute in Pilbright;
• and the Diamond synchrotron in Oxford.

Research and technological innovation will also help us with one of the greatest scientific challenges of our times – climate change – and it will support new jobs in low-carbon industries.

So today, even in these straightened times, we commit public capital funding of up to £1 billion to one of the world’s first commercial scale carbon capture and storage demonstration projects.

We will also invest over £200 million in the development of off-shore wind technology and manufacturing at port sites.

Yesterday, protestors scaled the Treasury urging us to proceed with our idea for a Green Investment Bank.

Mr Speaker, it’s the first time anyone has protested in favour of a bank.

We will go ahead.

I have set aside in this Spending Review £1 billion of funding for the Bank, but I hope much more will be raised from the private sector and the proceeds of future government asset sales.

The aim of all these investment is for Britain to be a leader of the new green economy. Creating jobs, saving energy costs, reducing carbon emissions.

We will also introduce incentives to help families reduce their bills.

We will introduce a funded Renewable Heat Incentive.

Our Green Deal will encourage home energy efficiency at no upfront cost to homeowners and allow us to phase out the Warm Front programme.

Overall, the total resource settlement for the Department for Energy and Climate Change will fall by an average 5% a year – but there will be a large increase in capital spending, partly to meet unavoidable commitments on nuclear decommissioning.

DEFRA will deliver resource savings of an average 8% a year – but we will fund a major improvement in our flood defences and coastal erosion management, that will provide better protection for 145,000 homes.

Britain’s arts, heritage and sport all have enormous value in their own right.

But our rich and varied cultural life is also one of our country’s greatest economic assets.

The resource budget for the Department of Culture, Media and Sport will come down to £1.1 billion by 2014-15.

Administrative costs are being reduced by 41%. 19 quangos will be abolished or reformed.

All of this is being done so we can limit four year reductions to 15% in core programmes like our national museums, the frontline funding provided to our arts and Sport England’s Whole Sport plans.

We will complete the new world-class building extensions for the Tate Gallery and British Museum in London.

The Secretary of State will provide details of further projects shortly.

I can also announce today that in order that our nation’s culture and heritage remains available to all, we will continue to fund free entry to museums and galleries.

There is ongoing provision of the £9.3 billion of public funding for a safe and successful Olympic and Paralympic Games in London in 2012.

And we have also approached the BBC to ensure that they too make their contributions, as a publicly funded organisation, to savings during this Spending Review.

I am pleased to confirm that this week we have struck a deal.

The BBC will take from the government the responsibility for funding the BBC World Service and BBC Monitor, as well as part-funding S4C.

This amounts to some £340 million of savings a year for the Exchequer by 2014-15.

To ensure that the cost of these new obligations is not passed on to the license fee payer, the BBC has agreed a funding deal for the full duration of its Charter Review.

The licence fee will be frozen for the next six years.

This deal helps almost every family and is equivalent to a 16% saving in the BBC budget over the period, similar to the savings in other major cultural institutions.

The BBC also agreed to reduce its on-line spend and make no further encroachments into local media markets, to protect local newspapers and independent local radio and TV.

And they will contribute to the £530 million we will spend over the next four years to bring super-fast broadband to rural parts of our country that the private sector will take longer to reach. 

Pilots will go ahead in the Highlands and Islands, North Yorkshire, Cumbria and Herefordshire.

All of this will help encourage the growth of our creative industries as a key part of the new economy we are seeking to build.

Mr Speaker, after our defence requirements are met, the Department for Transport will receive the largest capital settlement.

Over the next four years we will invest over £30 billion in transport projects, more than was invested during the past four years.

£14 billion of that will fund maintenance and investment on our railways. 

Direct bus subsidies will be reduced, but statutory concessionary fares will remain.

The cap on regulated rail fares will rise to RPI +3% for the three years from 2012, but that will help this country afford new rolling stock as well and improve passenger conditions. 

The Secretary of State will set out how more of the transport money will be allocated next week.

But I want to tell the House today about some of the projects that will go ahead.

For let’s remember that even after these tough spending settlements the country is still going to be spending over £700 billion a year.

So in Yorkshire and Humber, capacity on the M62 will be expanded, £90 million will be spent to improve rail platforms across various towns and cities and we will also improve line speeds across the Pennines.

In the North East, £500 million will be spent refurbishing the Tyne & Wear metro and Tees Valley bus network.

In the North West, we will invest in rail electrification between Manchester, Liverpool, Preston and Blackpool and we will provide funding for a new suspension bridge over the Mersey at Runcorn.

Rail and roads are devolved to the Scottish executive, as are roads in Wales – but I can tell the House that major rail investments around Cardiff, Barry and Newport will go ahead.

In the East Midlands the M1 and A46 will be improved.

In the West Midlands, we will extend the Midland Metro and completely redevelop Birmingham New Street station.

In the South West, we will fund improvements on the M5 and M4, and the new transport scheme for Weymouth.

In the East of England, colleagues will be delighted to know that the A11 to Norwich will be upgraded. 

Around London, we will widen the M25 between ten different junctions and complete the improvement to the A3 at Hindhead.

And in London, on top of the Olympics, a major investment in our capital city’s transport infrastructure will take place.

Crossrail will go ahead and key Tube lines will be upgraded for the twenty first century. 

This is nothing like the complete list. 

So yes, we are saving money and putting the state on a more sustainable footing, but even then we will still be spending tens of billions of pounds on Britain’s future infrastructure.

Next week we will also set out our national infrastructure plan – so that private money is also put to work in building for this country the economic infrastructure our businesses need.

Our regional growth fund will also help us do that.

As promised, a billion pounds has been found for the fund over the next two years. 

Money designed to lever in private investment in areas of our country where it has been too absent over the last decade.

And I can announce today that I am providing close to half a billion pounds extra in the third year for the regional growth fund.

Long term investment in the capacity of our transport, our science, our green energy will all help move Britain from its decade long dependence on one sector of the economy in one part of the country – and the ruin that led to.

But the most important ingredient a twenty-first century economy needs is well educated children, who believe in themselves and aspire to a better life whatever their background or disadvantages.

In June, after the Budget, when the Chief Secretary and I turned our attention to how to allocate spending between government departments, we set ourselves a goal.

We wanted to see if it was possible – even when spending was being cut – to find more resources for our schools and for the early years education of our children. 

I can tell the House that we have succeeded.

It has meant other departments taking bigger cuts.

But I believe strongly that this is the right choice for our country’s future.

There will be a real increase in the money for schools, not just next year or the year after – as the last government once promised – but for each of the next four years.

The schools budget will rise from £35 billion to £39 billion.

Even as pupil numbers greatly increase, we will ensure the cash funding per pupil does not fall.

We will also sweep away all the different ways in which money is ring-fenced so that schools can decide how to spend their money as they see best.

We will also introduce a new £2.5 billion pupil premium that supports the education of disadvantaged children, and which will provide a real incentive to good schools to take pupils from poorer backgrounds.

This pupil premium is at the heart of the Coalition Agreement and it is at the heart of our commitment to reform, fairness and economic growth.

Parents, teachers and community groups will be supported if they wish to establish free schools.

We will fund an increase in places for 16 to 19 year olds, and raise the participation age to 18 by the end of the Parliament – and that enables us to replace education maintenance allowances with more targeted support.

And we will also provide support for the early years of our children.

The increased entitlement to 15 hours a week free education for all three and four year olds – introduced under this government – will continue.

Sure Start services will be protected in cash terms, and the programme will be refocused on its original purpose.

And we will help them further by introducing for the first time 15 free hours of early education and care for all disadvantaged two year olds.

So these children have a chance in life and are ready, like the rest of their class mates, for school.

Overall, the Department for Education will be required to find resource savings of only 1% a year.

Central administration will be cut by a third and five quangos will go.

The capital budget will have to bear its share of the reductions.

As the House will know we’ve had to phase out the hopelessly inefficient and overcommitted Building Schools for the Future programme.

But £15.8 billion will be spent to maintain the school estate and rebuild and refurbish 600 schools.

I repeat – the resource money for schools, the money that goes to the classroom – on the broadest definition, including all the main grants, will go up in real terms every year.

It is a real investment in the future of our children and in the future growth in our economy too.

Mr Speaker.

Let me conclude.

The decisions we have taken today bring sanity to our public finances and stability to our economy.

They deal decisively with the largest budget deficit this House of Commons has ever had to face outside of wartime.

We have had to make choices.

Choices about the things we support.

And today, I have announced real increases in the NHS budget and the resources of schools, as well as new investments in the economic infrastructure of our economy.

I have also announced real reductions in waste and reforms to welfare.

And though this we will reshape public services to meet the challenges of our times.

Mr Speaker, during the process of this Spending Review I have received many submissions...

... including one from the party opposite that the average cut for unprotected departments should be set at 20% over the coming four years...

...rather than the 25% that I anticipated in my June Budget.

I have examined this proposal carefully and I have consulted the published documents of my predecessor the RHG for Edinburgh South West.

And because of our tough but fair decisions to reform welfare, and the savings we’ve made on debt interest...

... I am pleased to tell the House it has been possible – and the average saving in departmental budgets will be lower than the previous Government implied in its March Budget.

Instead of cuts of 20% there will be cuts of 19% over four years.

So I thank them for their input and look forward to their support.

Mr Speaker, this Coalition Government faced the worst economic inheritance in modern history.

The debts we were left threatened every job and public service in the country.

But we have put the national interest first.

Made the tough choices.

Protected health and schools and investment in growth.

Reformed welfare and cut waste.

Made sure that we are all in this together.

And taken our country back from the brink of bankruptcy.

A stronger Britain starts here.

And I commend this statement to the House.

ENDS

http://www.hm-treasury.gov.uk/spend_sr2010_speech.htm

This page summarises the changes in the Spending Review that affect disabled people. We will continue to update the details here as policy progresses.

On this page:

• Benefit cap
• Housing Benefit reform
• Universal Credit
• Mobility Component of Disability Living Allowance – Care Homes
• Employment and Support Allowance (ESA)
• Cold Weather Payments
• Social Care
• Psychological Talking Therapies
• Disabled Facilities Grant
• Disability Living Allowance reform – updated 23 May 2011
• Employment Programmes – previous announcements
• Get Britain Working measures

Benefit cap

• From 2013 the Government will introduce a cap on the total amount of benefits that working-age people can receive so that workless households can no longer receive more in benefits than the average family earns.
• The cap will be based on the median earnings after tax and National Insurance contributions for working households from 2013, which we expect to be around £500 for couples and lone parent households and £350 per week for single adults.
• War widows and all households with someone entitled to Disability Living Allowance, Constant Attendance Allowance paid as a component to Industrial Injuries Disability Benefit or Working Tax Credit will be exempt from the cap.
• The Government will introduce legislation in the Welfare Reform Bill and work with Local Authorities to implement the cap from April 2013.

Housing Benefit reform

• Expenditure on working age Housing Benefit has increased by £5 billion in just five years to £16 billion in real terms, and unreformed is set to increase by a further billion by 2015. The current system is unfair and unsustainable, and in need of urgent reform.
• From April 2011 we started making a number of changes to Local Housing Allowance. These reforms will not affect social housing tenants, who account for 69 per cent of the housing benefit caseload. The reforms include:
  • restricting the maximum Local Housing Allowance level to the four bedroom rate and applying overall weekly caps to the rates as follows:
  • £250 for a one bedroom property
  • £290 for two bedrooms
  • £340 for three bedrooms and
  • £400 for a four bedroom property
  • setting Local Housing Allowance rates so that 3 in 10 properties are affordable to Housing Benefit customers rather than 5 in 10 as is currently the case.
  • Removing the up to £15 weekly Housing Benefit excess that some customers can receive under the Local Housing Allowance arrangements.
• To help those in the most vulnerable circumstances who could be affected by these changes we are tripling expenditure on Discretionary Housing Payments. This budget will be increased by an additional £10 million in 2011/12 and then £40 million per year from 2012/13 giving a total of £60 million.
• Existing customers will also be protected for a period or nine months from the date their claim is reviewed on or after 1 April 2011. But people who receive more – up to £15 – Housing Benefit than their rent will lose the extra amount from the review date.
• From January 2012 the shared accommodation rate will apply to customers under 35 years instead of under 25 years as now. But we will keep the current exemptions for those in shared accommodation for people aged between 25 and 34. And those who need overnight care from a non-resident carer and who have a room available for the carer's use will not be affected by the extension of the shared room rate .
• People will see reductions in their Housing Benefit from April 2011 onwards, but the purpose of reform is to influence rent levels and housing choices so that Housing Benefit tenants have to make the same choices about their housing that people who manage without make. We want people to continue to have access to decent housing but the support we provide needs to be founded on principles of fairness, affordability and making work pay.
• We recognise the important work done by carers up and down the country and so we will put in an extra £60 million by 2015 to help fund an additional room for disabled people who have live-in but non-resident carers.

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Universal Credit

• The Government is committed to reforming the benefits system. The Spending Review set aside over £2 billion to invest in building a welfare system that is fit for the 21st century.
• Universal Credit will replace current working age means tested benefits – Working Tax Credit, Child Tax Credit, Housing Benefit, Income Support, income-based Jobseeker's Allowance, and income-related Employment and Support Allowance.
• Universal Credit will improve incentives to work (especially for low earners) by a combination of earnings disregards and a single withdrawal rate to reduce the Credit when earnings exceed the disregard. This will make the benefits of work clearer and simpler, encouraging people to move into work and see the financial benefits of increasing the number of hours they work.
• Universal Credit payments will be based on an assessment that the person cannot reasonably be expected to look for work (support component) or has limited capability for work and work-related activity (work related component).

• Universal Credit: welfare that works

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Mobility Component of Disability Living Allowance – Care Homes

• We have listened to the strong concerns raised by individuals and organisations and we will not remove the Disability Living Allowance mobility component from people in residential care in 2012.
• We will consider the needs of people living in residential care at the same time as all other Disability Living Allowance recipients as we develop the Personal Independence Payment in 2013.
• The Welfare Reform Bill includes provisions to introduce Personal Independence Payment, which will be the successor to Disability Living Allowance initially for working-age people. The Bill does include regulation making powers to decide eligibility for Personal Independence Payment for people who might be in receipt of state funding in a range of settings including in hospitals and care homes. This broadly reflects current practice in Disability Living Allowance.
• The detail of exactly how and when this will apply would be contained in regulations based on evidence of mobility needs and available support. We will ensure that when we introduce Personal Independence Payment from April 2013 it treats disabled people fairly, regardless of their place of residence; reducing overlaps of public spending, not disabled people's ability to get out and about.

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Employment and Support Allowance (ESA)

Time limiting the contributory ESA to one year for those in the Work Related Activity Group

• From April 2012 time limiting will affect all those who receive contributory Employment Support Allowance (ESA) and who are placed in the Work Related Activity Group. People in the ESA Support Group will be unaffected by the change, as will anyone receiving income-related ESA regardless of which group they are assigned to.
• After a year, those people who have no other means of supporting themselves may qualify for income-related benefits – there will always be a safety net for those who need it. Of those affected by time limiting contributory ESA, we estimate that 60 per cent will be able to claim some income related ESA.
• The Government is committed to supporting people back to work. Over the course of this parliament we are investing billions in back to work support, including through Work Choice and the Work Programme. The Work Programme will provide personalised support to a wide range of customers – from Jobseeker's Allowance recipients who have been out of work for some time, to customers who may previously have been receiving incapacity benefits for many years. It is important that people who are capable of moving towards employment are not left to spend years written-off by the benefit system.

ESA – abolition of youth provisions

• The Welfare Reform Bill 2011 abolishes the youth provisions which allow certain young people to qualify for contributory ESA without having to pay National Insurance contributions. These provisions are referred to as ESA "Youth" provisions.
• From April 2012, all new claims under ESA "Youth" will be subject to the same National Insurance contributory conditions as all other claimants. If they qualify for contributory ESA, and are then placed in the Work Related Activity Group, a one year time limit will also apply.
• It is estimated that 90 per cent of those affect by the abolition of ESA "Youth" provisions will qualify for income-related ESA, either at the same rate as they would have been getting on contributory ESA or at a lower rate as a result of other income being taken into account.

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Cold Weather Payments

• The previous administration temporarily increased cold weather payments to £25 per payment. We recognise the importance of this additional money to vulnerable groups and have therefore put this increase on a permanent footing.
• Around 4.2 million people are currently eligible for Cold Weather Payments to help meet heating costs every time the average temperature in the local area falls or is forecast to fall below zero degrees centigrade for seven consecutive days between 1 November and 31 March. Jobcentre Plus makes payments automatically to older people who receive Pension Credit and disabled people and families with children (who are under five years) who receive an income-related benefit.

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Social Care

• There is an additional investment to support social care reaching £2 billion per year by 2014-15. £1 billion of this will go through local government and £1 billion will be made available within the NHS to break down the barriers between health and social care.
• There will be continued support for elderly, disabled and vulnerable people through Supporting People Programme, which is £6.5 billion over the next 4 years.

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Psychological Talking Therapies

• By 2014, nearly a million people a year with depression or anxiety disorders will have access to psychological therapies, delivering the commitment made in the Coalition Agreement.
• The programme's services offer effective evidence-based intervention and treatment choice to people with depression and anxiety disorders. The nationwide roll-out of these services will be completed in 2014/15 and the benefits will be broadened to support children and young people, older people and those with serious mental illness or long-term physical conditions.

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Disabled Facilities Grant

• The Disabled Facilities Grant (DFG) has been protected within the Spending Review and increased in line with inflation. The allocation to Local Authorities for the DFG will increase from £169 million in 2010-11 to £185 million in 2014-15.

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Disability Living Allowance reform

• On 6 December 2010 we published "Disability Living Allowance reform", a formal public consultation on our proposed reforms to Disability Living Allowance. This document set out the Government's plans to replace Disability Living Allowance with a new cash benefit, called Personal Independence Payment, which will contribute to the extra costs of overcoming the barriers faced by disabled people to leading full, active and independent lives.
• The Personal Independence Payment will continue to be a non-means tested, extra costs cash benefit that people can spend as they choose. It will be introduced from 2013/14.
• The consultation closed on 18 February 2011. It sought views on our proposed reforms to DLA and on a new fairer, more transparent and more objective assessment.
• We received more than 5000 individual responses and over 500 responses from disability organisations.
• The Government published its response to the DLA reform public consultation on 4 April 2011.
• On May 2011, we published an initial draft of our proposals for the Personal Independence Payment assessment criteria. We also published an explanatory technical note which outlines our plans for refinement and testing of the initial draft criteria. We are keen to hear views from disabled people and their organisations on this initial draft between now and 1 August 2011.

• DLA reform consultation – Government response
• Personal Independence Payment – draft assessment criteria

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Employment Programmes – previous announcements

• We know that disabled people want the chance to compete in the labour market. DWP Employment Programmes can provide the support and training to enable them to get and keep those jobs.

  The key employment programmes are as follows.

Pre-Work Programme

• From April 2011, Jobcentre Plus managers and advisers will have the flexibility to focus on helping people rather than on completing activity and processes, and will have more discretion to tailor support for customers according to their individual needs.

Work Programme

• The Government is committed to fighting poverty, supporting the most vulnerable and helping people break the cycle of benefit dependency. As a result we are making significant reforms to the welfare-to-work programmes currently available to Jobcentre Plus customers.
• The Spending Review 2010, announced on 20 October 2010, confirmed the Department's commitment to reform and the introduction of the Work Programme.
• The Work Programme represents a step change for Welfare to Work in this country, creating a structure that treats people as individuals and allows providers greater freedom to tailor the right support to the individual needs of each customer.
• It will replace much of the confusing array of existing programmes for unemployed people.
• The Work Programme will also ensure good value for money for the taxpayer by basing payments largely on results, and paying providers from the benefits saved from getting people into work. It is very much a partnership between Government and providers from across the public, private and third sectors – including social enterprises.
• The Government aims to have the new Work Programme in place nationally from the summer of 2011
• For those customers who require further support as they reach the end of the Work Programme without moving into sustained employment, we are currently developing proposals for a programme of post-Work Programme support which we aim to have in place from 2013.

Work Choice

• Work Choice will run alongside the Work Programme and Pre-Work Programme Jobcentre Plus offer, including "Get Britain Working" employment initiatives.
• Work Choice provides disabled people with complex barriers to employment, and more intensive support needs with:
  • a seamless service covering all stages of the journey into work
  • support to enable them to stay in work where the other DWP employment provision might not be suitable – including support for those who wish to move into self-employment.
  • It also includes support for those who wish to move into self-employment.
• Work Choice will simplify the current overlapping set of programmes and will reduce the number of provider contracts from more than 200 to just 28. Work Choice is being delivered by prime providers in 28 Contract Package Areas (CPAs) and by Remploy in 26 out of those 28 CPAs.
• We expect around 23,000 people to be supported by Work Choice in each year of the programme; and an average of about 9000 people to move into employment each year.

• Work Choice (Directgov)

Access to Work

• Access to Work has an important role to play in supporting disabled people to get and keep jobs. The programme has been through a reshaping exercise, to improve its focus and value. This included:
  • asking larger employers to make a more substantial contribution towards aids or equipment This will free up resources to go to those working for smaller employers, and
  • enabling customers to have an even more personalised package of support, with an individual development plan, more frequent reviews, and more intensive discussion about building independence and self-reliance.
• The change to employer contributions took effect from April 2010 and the other changes will be progressively brought in over the course of 2010/11.
• The Coalition Agreement states that: "We will reform Access to Work, so disabled people can apply for jobs with funding already secured for any adaptations and equipment they will need." From 9 December 2010, disabled jobseekers have been able to find out immediately if they are eligible for Access to Work support by completing a short on-line questionnaire at Directgov. If eligible, they are then able to print off a new Pre-Employment Eligibility Letter which will help build their confidence when applying for jobs and can be shown to prospective employers.
• We are continuing to look at ways of making the programme more efficient and effective, so the maximum number of disabled people can be helped to get and keep jobs. This will include ensuring that employers are meeting their duty to make reasonable adjustments to support their employees. Access to Work is available to support costs faced by a disabled person, or their employer, beyond what is reasonable for an employer to meet.

Remploy

• 2011/12 is the fourth year of Remploy's five-year modernisation plan. Following the government's 2010 review of Non Departmental Public Bodies and the spending review settlement, the budget for Remploy Limited during the five-year modernisation plan remains unchanged at £555 million. Remploy's status continues to be both a non-departmental public body and public corporation.
• Remploy supported around 10,600 disabled and disadvantaged people into work in 2009/10.
• DWP continues to work with Remploy to identify ways to improve the services the company provides to maximise the number of disabled people supported into sustainable employment.

• Remploy website

Sayce Review of Specialist Disability Employment Programmes:

• On 2 December 2010 the Minister for Disabled People, Maria Miller, announced an independent review of the Department's current employment support for people with severe disability-related barriers to work. The review is being conducted by Liz Sayce, Chief Executive of Radar, and will make recommendations about how this employment support can be further improved to provide better value for money over the life of this Parliament.
• The review includes the support currently provided by Access to Work, Residential Training Colleges and Remploy. The recommendations made by the review will build on the foundation provided by the Work Programme and Work Choice, and must be deliverable within the existing funding envelope, as set out in the Department's spending review settlement. A fundamental review of the Work Programme and Work Choice is out of scope of this review.
• A call for evidence was launched on 2 December 2010 to inform the review and this closed on 28 February 2011. The review will publish its recommendations by summer 2011.

• Specialist Disability Employment Support (Sayce Review)

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Get Britain Working measures

• We are modernising the way Jobcentre Plus delivers its services – giving more responsibility to Jobcentre Plus advisers to assess customers' individual needs and to offer the support they think most appropriate. This includes access to a number of Get Britain Working measures for which Government is asking for the active engagement of employers, partners and customers themselves in every community in Britain. The measures include:
  • the New Enterprise Allowance will support unemployed people who are looking to start their own business by providing access to finance and valuable support from local entrepreneur mentors;
  • Enterprise Clubs will help people make the most of local knowledge and resources to support unemployed people who are interested in self-employment;
  • Work Clubs will encourage people who are out of work to exchange skills and share experiences, enabling individuals to take responsibility for planning their own journey back to work with the support of others going through the same experience;
  • Work Together will help customers develop work skills through volunteering, supported by local charities and voluntary organisations willing to give them an opportunity
  • Work Experience will enable young unemployed people to have a period of work experience with a local employer, fostering the work habit, boosting their confidence and creating opportunities for them to get on the job ladder;
  • a range of sector-based work academies will offer sector based pre-employment training and work experience placements.

http://www.dwp.gov.uk/adviser/updates/spending-review-2010/