Chief Secretary to the Treasury, Simon Clarke MP, has set out plans for a 'quiet revolution' to ensure the government cuts waste while protecting frontline services.
Speaking this week at the Institute of Economic Affairs, Mr Clarke explained the changes currently being undertaken to ensure the UK's finances are watertight in anticipation of uncertain times ahead.
Following the extraordinary response of the Government to the coronavirus pandemic, Mr Clarke told the IEA that debt interest in 2022 was at a record high of £83 billion - four times what it was the previous year.
As a result Mr Clarke has told cabinet colleagues that individual projects and staff pay rises would have to be funded from cuts elsewhere, as he insisted that the government had reached the “high-water mark” of spending.
He also noted that civil service numbers had increased by 23% since 2016 and 7% since last year.
“That is impossible to justify long term and something that we are determined to address," Mr Clarke said.
Focusing on cutting spending in Whitehall, Mr Clarke said that the Covid “era of exceptionalism” is over and fiscal discipline must return.
Mr Clarke said: "As Chief Secretary to the Treasury, it is my job to improve how we spend every penny of taxpayers' money on their behalf and to the best extent the government can, in their best interest.
"Following an extraordinary period for government finances, there is now a quiet revolution going on at the Treasury and beyond.
"Right across Government, we're taking concrete steps to cut waste, improve efficiency, accelerate delivery and boost productivity - all under the traditional Treasury rubric of responsibility and sound money.
"These are values I am determined to see lived even more fully, right across the government."
He added: "It cannot be the case - and will not be the case - that further requests for unfunded spending are approved. That message needs to go out unequivocally"
Far from a policy of “austerity 2.0" Mr Clarke said real-term spending will still increase for the next three years.
But he was clear that following an “extraordinarily generous” spending review in October, there could be no further cash injections as were the case during the pandemic.
Mr Clarke said: “Last autumn’s spending review marks the limit of fiscal expansion — the high-water mark of our commitment to honour what we set out in our manifesto, and not a point at which anyone should expect us to go further.
“The stark reality is that we are not going to be in a position to manage that debt burden, to invest in the key public services in the way we want, and also to create the headroom for the lower taxes, which the chancellor has set out in his tax plan, if we don’t have fiscal discipline.”
Mr Clarke added that central government had made £3.4 billion in savings last year, “a demonstration of the opportunity that exists” for efficiencies.
“Some parts of Whitehall remain resistant to change. Frankly, it’s sometimes easier to expand the state than it is to remodel or to streamline it, but we are alert to that,” he said.