The Government’s Spending Review 2010 :: American Government, Budgeting, Spending Plans

The presidencys spend Review 2010The way the government sets out its budget is by dint of allocation of monies to different governmental departments. These departments then allocate monies for services much(prenominal) as, health, defence, welfare benefits etc. The Spending Review is the way that the administration sets disbursement plans for each department over a period of several age (Anon, 2010)1. On 20th October 2010, the Government announced substantial UK spending cuts with local anesthetic authorities, police, defence and welfare budgets all reduced. As a result the Government intends to cut 81 bn from public spending over four days (BBC, 2010)2. Up to 500,000 public sector jobs could go by 2014/15, as a result of the cuts programme, according to the Office for Budget Responsibility (HM Treasury, 2010)3.Over the cultivation few years the gap amongst what the Government took in as income and what it had to borrow to spend on services grew significantly. The yea rly gap between the Governments income and what it spends is known as the deficit. In novel years this deficit has grown in size. The key outcome from the Spending Review 2010, was to set in train a process of acidulous the deficit and to make it more manageable and affordable in the forthcoming years. The government intends to do this through, reduction in government spending, such as, nest egg from welfare reforms and increases in taxation, e.g. the increase in VAT to 20 part in January 2011 (Williamson, 2010)4.In the UK the Government obtains its income mainly from taxation, National Insurance contri justions and grave duties. Due to the recession which began in 2008, the Governments income dropped, but Government spending continued to increase. The deficit last year (2009/10) was 155 bn (Anon, 2010)1. This is the bill of additional money the Government had to borrow to be able to wear for its spending on governmental activities last year. MacroeconomicsThe UK Gover nment is pinning its hopes in the growth of the British economy, to help increase its income from taxation and by trim back the size of the public sector. The Office for National Statistics (ONS,2010)5, confirmed in its implore release on 24th November 2010, that the UK economy grew at 0.8% between July and family 2010. The 0.8% figure represents a slow down from 1.2% in the second quarter, but is still better than had been expected in the summer (Grierson, 2010)6.