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Gordon Brown unveils £12bn spending cuts

Gordon Brown is to begin setting out Labour's plans for cutting public spending by £12bn over four years, ahead of Wednesday's pre-Budget report.

The PM will unveil the "efficiency savings" as he tries to show how Labour could halve the UK's budget deficit.

Chancellor Alistair Darling has said he will "indicate" some cuts on Wednesday but not deliver a full spending review.

The Conservatives have accused the government of not being straight with voters on the scale of cuts needed.

The government has delayed its planned comprehensive spending review until after a general election. Its annual pre-Budget report takes place on Wednesday.

Windfall tax

In his speech on Monday, Mr Brown will say ministers have identified £3bn in additional efficiency savings since the Budget in April.

Of that, £1.3bn will be achieved by streamlining central government, he will say, indicating that certain programmes will have to be delayed or abandoned.

"In order to protect the front-line services we value, at a time when budgets are tighter, it means we need to do what households up and down the country do to prioritise the necessities and postpone the things we can do without," the prime minister will say.

The government will be "relentless" in finding new ways to save money and will take the "tough decisions" needed to realise them, he will add.

"The proposals we are setting out in this plan - which is just one element of our efforts to reduce the deficit - will go further than we have ever gone before in streamlining central government," Mr Brown will say.

"We have already promised savings of £35bn a year by 2011 on top of the £26.5bn a year already delivered through the Gershon [spending] review.

"But by identifying new ways of working - and being prepared to make the tough choices - we can deliver in excess of another £12bn in efficiency savings over the next four years.

"This includes £3bn of new efficiency savings identified since the Budget - of which over £1.3bn will come from streamlining central government."

The prime minister will say technological advances can enable services to be both responsive and more cost-effective.

'A lot tighter'

In his pre-Budget report speech on Wednesday, Mr Darling is expected to confirm annual borrowing will top £175bn.

The chancellor told BBC One's Andrew Marr show on Sunday that public spending would be "a lot tighter than it was in the past" as a result.

He said parts of the troubled £12bn NHS IT system would be delayed as it "isn't essential to the front line" - a move thought likely to save hundreds of millions of pounds, although the exact details will be spelled out later this week.

Mr Darling said the full details of spending cuts would not be revealed until "the first half of next year at some point".

Meanwhile, as part of plans to tackle the deficit in public finances, the Treasury is also working on a possible windfall tax on what it sees as the exceptional profits of banks or the excessive bonuses of bankers.

But the Conservatives say the government is still not revealing the full extent of cuts needed to tackle Britain's debts.

Shadow Chancellor George Osborne said he would protect NHS and international development spending but the rest of Whitehall would face "very difficult choices" if the Tories won power.

The party has also called for a moratorium on all government computer projects, claiming Labour has spent £100bn on IT since 1997 and that contracts worth another £70bn are due to be renewed or commissioned in the next two years.

Source: BBC News

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