Decc agrees budget cut with Treasury

The Department of Energy and Climate Change (Decc) has agreed with HM Treasury to cut its budget by up to 10 per cent.

Decc is likely to face a reduction of about £400 million to its annual budget following the deal.

The cut of about 10 per cent comes as Chancellor George Osborne is working through another spending review in an attempt to reduce departmental spending by £11.5 billion by April 2015.

Osborne has also agreed cuts with six other Whitehall departments, including the Ministry of Justice, the Cabinet Office, and the Department of Communities and Local Government, totalling £1 billion.

So far, the chancellor has said he is about 20 per cent of the way to finding the savings, and making “better progress” than normal at this stage of a spending review with the agreed savings coming on top of the £1.5 billion of cuts announced in the budget.

Osborne said: “We’ve taken decisions on welfare but we have also got to look at Whitehall, look at the waste still in government and today a whole range of departments, like the justice department, energy department, communities department, are all accepting significant savings to make sure the money, that after all comes from the people watching this programme and their taxes, is well spent.”