Prepare for budget cuts of 25%, Chancellor says

The government has announced that non-protected departmental budgets will be cut by an average of 25 per cent over the next four years.

The announcement was made by the Chancellor in today’s emergency Budget. However, details of precisely where the cuts will fall will not be set out until 20 October, after the Comprehensive Spending Review.

George Osborne said that although non-protected departmental budgets will experience “average real cuts of 25 per cent over four years…not all will receive the same settlement”. He added that he recognised the “particular pressures” on the education system and on defence.

The Conservative Chancellor, who said his emergency Budget was “tough but fair”, also announced that the rate of VAT will rise from 17.5 to 20 per cent in January 2011.

Universities will be hit by the increase because they cannot charge VAT on most of the services they produce. This means that they cannot recover the VAT that they have paid themselves on costs.

john.gill@tsleducation.com

• For more coverage of the Budget, see Times Higher Education on 24 June.