2010 Spending Review

Fda Leadership and Management
Module – The Organisation’s Environment (TOE)
Investigating the impact of the 2010 October Spending Review on the British Broadcasting Corporation (BBC)
Word count - 1927

On October 20th 2010 the United Kingdom was given the details of the Comprehensive Spending Review. This is when the Treasury allocated resource to all government departments informing them of their future budgets. Along with this came details on spending within social security, local authority and other non-departmental sectors such as tax credits. Responsibility then falls on these departments to manage these available resources.

The Spending Review is a relatively new process with the Government introducing it in the late 1990s. It covers a four year budget period which counteracts the inaccuracies and lack of foresight that an annual budget can bring. The October 2010 Spending Review details the future budget up until the end of the 2014-2015 tax year. The previous June budget was set out by the Treasury to detail total public spending for this four year period. The October Spending Review designated portions of this total budget to each area of public spending.

In the financial year 2009/10 the UK recorded general government net borrowing of £159.8 billion, which was equivalent to 11.4% of Gross Domestic Product (GDP). The interest alone on this debt is estimated at £120 million per day. At the end of March 2010, general government debt was £1000.4 billion, equivalent to 71.3 per cent of GDP (O.N.S, 2010). In order to eliminate this deficit the Chancellor of the Exchequer, George Osborne pledged to achieve the reduction according to a simple formula: 74% will be paid for by spending cuts, while the other 26% will be taken care of by means of tax rises. This equates to £81 billion of spending cuts and a further £29 billion in tax rises (Telegraph, 2010a).

Appendix A is a good indication of which departments have seen cuts and which have seen...