Monday, 08 October 2007 21:00

Chancellor to unveil spending plans

Written by  Ruralcity Media

ImageThe government's Comprehensive Spending Review is expected to cut rural expenditure.

Mr Darling will unveil his spending review and pre-budget report to parliament at 3.45pm on Tuesday (9 October).

The spending review, which will set expenditure limits for government departments, is likely to have a big impact on the services delivered to rural economy.

It will set out the government's spending plans for 2008-09, 2009-10 and 2010-11.

The review will also outline the Public Service Agreements (PSAs) which define the improvements that the public can expect from government spending.

Most centrally-set public service agreements are likely to be scrapped and replaced by deals between delivery agencies, councils and local communities.

The pre-budget report - an update on the state of the economy and public finances - will set out the direction of government policy in the run up to the spring budget.

Mr Darling has already warned that Britain is entering a period where there "may be some economic turbulence".

"These are difficult times and they need a steady hand," he told the BBC's Politics Show on Sunday (7 October).

"We need to be cautious in relation to what we do, but I am confident that we will emerge through these problems and we will emerge through this with a strong economy."

Earlier this year, the Commission for Rural Communities said the spending review provided the opportunity for a fundamental review of the balance and pattern of public expenditure.

But forecasts that economic growth is set to slow and the public deficit is set to widen have fuelled speculation that some government departments will fail to get the money they hope for.

Some experts believe the government's economic growth prediction for 2008 - currently between 2.5 and 3% - could turn out to be less than 2% in reality.

This would mean reduced tax revenues and less public expenditure unless Mr Darling decided to break Prime Minister Gordon Brown's pledge to only borrow to invest, rather than to fund current spending.

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