16.45 Also got some info on how the £1.165 billion of local government savings break down. The figures don't seem to add up, but it's all we've got at the moment. The figure, according to DCLG, relates to the amount of funding local government gets from across Whitehall. Here are the savings in local government spending that each department is making:- £362m from CLG
- £175m from local government
- £311m from Dept for Education
- £309m from Dept for Transport
- £8m from DEFRA
16.40 More detail now on how the DCLG's contribution to the savings breaks down... It says that, of the £740 million it is contributing, £268 million will come from "cutting waste and inefficiency", including £186 million from the RDAs and £82 million from cutting waste and inefficiency in the department and its quangos. A further £150 million will be saved from the Labour government's housing pledge, while £362 million "will be delivered through reducing grants to local government". A further £405 million of savings will be delivered from the DCLG's spending on local government, including £160 million from PFI underspends, £41 million from unallocated funds, £29 million through scrapping quangos (including the Audit Commission) and £175 million by reducing grants to local government.
16.32 New Local Government Network acting director Anna Turley said: "Whilst local government has been anticipating significant spending cuts since 2008, many councils would have expected their 2010/11 grant allocation to remain as they have budgeted rather than significantly amended downwards. The scale of cuts which the sector will have to implement before March next year is a colossal challenge and points towards local government facing a difficult Spending Review later on this year."
16.30 South East Diamonds for Investment and Growth (SEDfIG) chair Andrew Finney said: “We hope that the announced budget cuts to regional development agencies don’t amount to a hammering of the South-East. The Government is quite right to cut the cost of public agencies, but we can’t short change the areas with the most economic potential."
14.39 The £270 million cut to the RDAs' budgets is being shared by four departments: DCLG; Business Innovation and Skills; Defra; and the Department for Energy and Climate Change. £74 million of cuts will be from the business department's contribution.
13.33 Sarah Webb, chief executive of professional body the Chartered Institute of Housing, said: "These are difficult times, and it is clear that funding for housing has come under close scrutiny. Today's announcement suggests a mixed-bag for housing. On the one hand there are cuts from housing pledge initiatives; on the other hand these savings have been re-allocated into new affordable housing." She added: "What isn't fully clear, however, are the nature of cuts to existing initiatives and the impact their withdrawal could have. It also remains to be seen what reductions in funding for local government and devolved authorities could have on their respective housing responsibilities."
13.25 Some comment now on the implications of the spending cuts for regeneration. Tim Johnson, director in development consulting at real estate adviser DTZ, said: "More clarity is needed on what the Government deems to be 'lower value' RDA spend. With public sector budgets so stretched, it will be crucial to use clear tests to demonstrate which regeneration projects are viable and should be prioritised for investment. The focus should now be on regeneration projects where public sector money can help to de-risk and facilitate private sector investment. This would not necessarily take the form of a grant, but could involve public bodies taking an equity stake in a scheme, allowing them to benefit from any future uplift once projects are delivered as well as sharing risks."
13.23 Richard Lambert, CBI director-general, said: “We have been calling for a strong focus on deficit reduction to underpin the UK’s fiscal credibility and position us for a strong private sector led recovery. It is encouraging that the Treasury has managed to find slightly bigger savings than first expected. The measures announced by the Chancellor, including departmental spending cuts and a civil service recruitment freeze, are painful but necessary steps to demonstrate the UK’s seriousness about tackling the deficit. Just as private sector firms had to take strong action to cut costs during the recession, so too must the public sector. We believe there is still considerable scope to make even greater savings by re-engineering public service delivery.”
12.44 Gail Cartmail, Unite assistant general secretary for the public sector, said: "Within a fortnight of coming to office, the coalition government has taken a fundamental economic wrong turn by sucking £6bn out of a still fragile economy. While the cuts, such as reductions in civil servants’ travel, management consultants and quangos, may appear to be peripheral to the central deficit debate, this is the harbinger of some very painful cuts that will be come in the Budget on 22 June and in the comprehensive spending review in the autumn."
12.19 This from Andy Sawford, chief executive of the Local Government Information Unit: "This means that local government will have to contribute 20% of the government's £6.2bn cuts in public spending this year. It leaves local government carrying the can for wasteful spending in Whitehall and footing the bill for political promises on those areas of 'protected' spend. The bright spot is that some ring fencing will be removed to give councils more flexibility at a local level, but to make this much more effective, councils should be given the responsibility to bring together all local public spending using a Total Place model."
11.41 Further details now emerging... RDAs will have to find £270 million in savings in 2010/11, through "ending lower value spending". The Future Jobs Fund has been scrapped. Local government has taken a big hit - it will make a contribution of £1.165 billion towards the overall saving of £6.2 billion.
10.27 £500m of savings reinvested. This includes £170m in social rented housing in 2010/11, leading to 4,000 housing starts. Also includes £150m for apprenticeships and £50m for capital investment in further education facilities.
10.25 RDAs will have to cut back on spending that would have a low economic impact, Laws says. He adds that there will be cutbacks to Train to Gain.
10.24 Government to end Child Trust Fund payments
10.20 Government to remove ring fence from £1.7bn of local authority budgets in 2010/11. Departmental savings outlined by Laws are huge - DCLG £780m; DFT £683m; Business more than £800m.
10.13 £1bn savings on consultancy, £2bn on IT, £700m on recruitment & quangos, £500m from 'low value' programmes. Osborne promises to protect schools spending, Sure Start and 16-19 education spending.
10.08 £500m of the cuts will be "recycled", Osborne says.
09.50 The announcement should be in just 10 minutes. You can also follow our coverage on Twitter - @regenerationUK @regencarpenter @regentownsend @regenhickey
09.17 Former Labour ministers Rosie Winterton and Phil Woolas have warned in an article in yesterday's Observer that the cuts risk deepening England's north-south divide by hitting regions heavily dependent on public sector employment hardest.
09.10 Later this morning, chancellor George Osborne will announce how the new coalition government will make £6 billion of savings in the current financial year. According to media reports over the weekend, regeneration spending could be hit hard, with regional development agencies in particular likely to face cuts. The cuts are likely to be spread across Whitehall departments, but the Times says that the business department will have to find £900 million of savings over the next nine months. We'll be updating this live blog throughout the day, bringing you up to the minute news of where the cuts are going to hit and reaction from the regeneration sector. Send any comments to jamie.carpenter@haymarket.com, or post them below.
