A new Adam Smith Institute report recommends 3% annual cuts in every departmental budget for the life of the parliament. Such cuts would reduce spending by £91 billion by 2015. The report by Nigel Hawkins is titled The Party is Over – A Blueprint for Fiscal Stability. Mr Hawkins, a City economist, backs George Osborne's decision to cut early but questions the decision to ringfence the NHS. It argues that the NHS budget should be cut by 2% every year with a focus on:

  • Reducing payroll costs outside nursing;
  • Managing hospital bed occupation more effectively;
  • Creating greater efficiencies within PCTs;
  • Cutting the annual drugs bill;
  • Regaining control of the disastrous NHS IT project; and
  • Scaling back the hospital-building programme.

Hawkins recommends that Secretaries of State unable to deliver 3% annual cuts should be fired.

The report – PDF here – also identified candidates for privatisation. Hawkins estimates that George Osborne can gather £16bn from non-bank privatisations including £3.8bn from the Royal Mail and £48.5bn from sale of the nationalised banks.

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