Spending Review: Home Office agrees cuts with Osborne

The Home Office and five other departments are the latest to reach a deal with George Osborne over spending cuts, the government has confirmed.

About half of all departments have now agreed to cuts of between 8% and 10% to help tackle the deficit.

But some of the biggest spenders are yet to settle and savings so far amount to less than a third of the additional £11.5bn cuts announced in the Budget.

Labour says Mr Osborne has to cut more because of his failure on the economy.

Departments still in talks with the Treasury are the Ministry of Defence and the Department for Work and Pensions, Education, Transport, International Development and Health.

They must reach a deal by 26 June, when the chancellor is set to announce his Spending Review.

The latest to settle are the Department for Rural Affairs; Department for Culture, Media and Sport; Scottish Office; Wales Office, and Law Offices which include the Crown Prosecution Service.

'Real progress'

They have had to swallow average cuts of 8% across the board but policing counter terrorism is to be protected at the Home Office.

The latest deal adds up to savings of £1.1bn towards the £11.5bn savings target announced at Budget 2013.

Taken with the near £1.5bn savings delivered in the Budget and the £1bn savings delivered in the first phase of settlements, this brings total savings to £3.6bn, less than a third of the way towards the £11.5bn.

Chief Secretary to the Treasury Danny Alexander told BBC Radio 4's World at One the government was "on track" to make the savings and was already "well ahead of where we were in the 2010 spending round".

He said it was not just about "making the numbers add up", but about making sure they had the money to protect the NHS, fund schools and protect counter terrorism policing.

Tuition fees

Asked if the point of advertising which departments had settled was part of a "name and shame" strategy - he said the details often leaked out anyway and it was important to "show people" the government was making progress towards dealing with the deficit.

Mr Alexander denied press reports of rows with Business Secretary Vince Cable over proposed cuts in higher education spending, which is funded by Mr Cable's department.

According to The Daily Telegraph, graduates could be forced to start repaying their student loans earlier to save cash.

But Mr Alexander said such stories were not true and student loans were "not an issue" in the current public spending round and there would be no such move, "on my watch".

He said he was having "very sensible" discussions about savings in Mr Cable's, and other, departments.

He also played down concerns - expressed by the head of the army General Sir Peter Wall - that further budget cuts at defence could endanger soldiers' lives.

'Good sign'

Mr Alexander told the BBC News channel: "We are having a very careful and serious discussion about how we can make the sorts of savings in the Ministry of Defence that don't affect our frontline capabilities.

"There is plenty of room to do that in a large department like the Ministry of Defence."

In an interview with Sky News, he said: "In a department where there are more horses than tanks there is room for efficiency savings."

It comes as Prime Minister David Cameron promised not to make further cuts to the number of military personnel beyond those already announced.

A Ministry of Defence source welcomed Mr Cameron's commitment but added that the department had been focussing on efficiencies to make the savings required by the Treasury rather than cuts to frontline forces and capabilities.

The MoD has still to agree with the treasury the next round of savings. A source said: "We are not out of the woods yet but this could be a good sign."

The chancellor has called for further belt-tightening in Whitehall, on top of the billions being cut from departmental budgets between 2011 and 2015, as he tries to get to grip with the deficit in the public finances.

For Labour, Shadow Financial Secretary to the Treasury Chris Leslie said Mr Osborne had been "forced to ask for more cuts" because of his "total failure on living standards and growth has led to billions more borrowing than he planned.

"Far from balancing the books the deficit is now set to be over £90bn in 2015."

He added: "It's totally chaotic for the government to be conducting spending negotiations in public this way, with big departments like defence and work and pensions yet to reach agreement."