British gov't departments announce spending cuts of $16 bln

13:33, March 25, 2010      

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Britain's Prime Minister Gordon Brown leaves after a Budget cabinet meeting at Downing Street in central London March 24, 2010. Britain's Labour government looks set on Wednesday to use its last budget before an election that is just weeks away to cut borrowing in an effort to calm investors and voters nervous about a record budget deficit. (Xinhua/Reuters Photo)

British government departments announced, on Wednesday, a round of spending cuts totaling 11 billion pounds (about 16 billion U.S. dollars) as their first contribution towards cutting the record public sector borrowing requirement (PSBR).

The announcements came on Wednesday afternoon, after Chancellor of the Exchequer Alistair Darling revealed the figure as he unveiled his last budget before the coming election. The figure had first been announced in his Pre-Budget Report in early December, 2009.

Darling revealed that the PSBR would be 167 billion pounds ( about 249 billion U.S. dollars) this year, and vowed to halve that over four years. These cuts are the first step towards that, but far more savage cuts will be necessary from whichever government wins the general election, which is due before the first week in June and is likely to be on May 6.

The lion's share of the cuts will be made in the National Health Service, Britain's free hospital and healthcare system. The Department of Health said it would save 4.35 billion pounds (about 6.5 billion U.S. dollars), with savings being made in energy use, and 1.5 billion pounds (about 2.2 billion U.S. dollars) saved by driving down the cost of procurement. An additional 550 million pounds (about 819 million U.S. dollars) would be saved from better staff productivity, lower sickness rates and using fewer agency workers.

The Department of Children Schools and Families said it would make 1.1 billion pound (about 1.6 billion U.S. dollars) cuts, with 950 million pounds (about 1.4 billion U.S. dollars) from schools.

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