Chancellor George Osborne has today outlined the details of the Comprehensive Spending Review and the breakdown of a total £81bn worth of savings from the public spend.
Most significantly for manufacturers, the Department for Business, Innovation and Skills is expected to find a 7.1 per cent annual saving each year between now and 2015.
The science budget is to be protected at £4.6bn though; efficiency savings of £324m here will be put back into projects.
There will also be more money for 75,000 extra adult apprenticeships over the term of spending review.
Administration savings from BIS will total £400m.
The £1bn Regional growth fund is to be extended by £500m, a move EEF’s Steve Radley labelled as critical in funding important investments in our infrastructure.” He warned that clear guidelines are required on how funds can be accessed though.
The Department for Energy and Climate Change will be making extra capital investments, Osborne declared, despite having to find an overall saving of five per cent per year.
Up to £1bn is to be provided to develop carbon capture and storage systems although commentators have pointed out though that this would pay for just one demonstration unit where the initial plan was for four. Also, under the Carbon Trading Scheme, bonus incentives were going to be provided to the best performing companies. This will no longer happen, pocketing the treasury £1bn.
Osborne put aside up to £1bn for a green investment bank and £200m for offshore wind turbine technology and port regeneration, dispelling recent rumours that a £60m competition pot for the latter would not survive the axe.
According to EEF’s Steve Radley, the plans will “not deliver the private investment necessary and we still need greater clarity on the Bank’s remit.”
The pension age is to rise to 66 from 2020 – six years earlier than planned but four years later than when Osborne had previously touted.
Overall, EEF chief executive Terry Scouler said manufacturers will be relieved that the cuts were not as hard hitting as some feared they might be.
“Today’s statement showed the Chancellor understands the areas on which to focus,” he said, “we now need the detail of how we are going to get there.
“However, for companies the suspense is not yet over and they need clarity on the government’s strategy for growth and, in particular how it will work with the private sector to leverage investment. Industry has already started to increase its investment but this will only be sustained if the government sets out a clear framework for the longer-term. Further announcements in the next few weeks now assume a critical importance.”