News story

The Spending Review 2010

Today HM Treasury has announced the results of the comprehensive spending review

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

The Chancellor of the Exchequer George Osborne has announced the public spending limits for the next four years and how the Government will carry out Britain’s deficit reduction plan. For the Department for Business, Innovation and Skills:

  • The resource budget will be reduced by 25 per cent and capital spending will be cut by 44% over the course of the Spending Review period (from 2011-12 to 2014-15).
  • BIS’s Administration budget will be reduced by 40 per cent, including savings of £228 million from abolition of the Regional Development Agencies.

Business Secretary, Vince Cable, said:

“I called BIS the Department for Growth as soon as I joined the coalition government. I have been clear that growth must also be sustainable.

“The threat to our national economy is the large financial deficit which if left unchecked will damage our capacity to grow and rebalance our economy.

“I am not going to say that any of these cuts are going to be easy and many people are going to feel the consequences, but without action all of us, for years to come, would pay the price. These decisions have been hard but they are necessary”

What this means for BIS:

  • The Government will change the way Higher Education is funded, in line with the Browne recommendations.
  • The Further Education resource budget will be reduced by 25%, or £1.1billion. The Government will boost spending on adult apprenticeships by up to £250m by 2014-15.
  • Science and research funding will be supported, maintaining the science budget in cash terms over the Spending Review period, ensuring that the UK remains a world leader.
  • The Department will play a key role in the operation of the new £1.4bn Regional Growth Fund.
  • The Department will lead the creation of a UK-wide Green Investment Bank.

Outcome of the CSR

BIS will manage the reductions in resource spending by reforming Higher and Further Education funding, delivering broadly 65 per cent of BIS total savings; driving efficiencies will deliver around a further 25 per cent and the remainder of savings, around 10 per cent, are from cancelling lower priority activities.


Higher Education

In line with the Browne Report’s recommendations the Government is changing the way that Higher Education is funded, moving away to a system where those who benefit make a greater contribution to the cost.

This means the overall resource budget for Higher Education, excluding research funding, will reduce from £7.1 billion to £4.2 billion, a 40%, or £2.9 billion, reduction by 2014-15. The Department will continue to fund teaching for Science, Technology, Engineering and Mathematics (S.T.E.M) subjects.

The Government will, by 2014-15, establish a new £150m National Scholarship Fund to support students from disadvantaged backgrounds.


Further Education

The Further Education resource budget will be reduced by 25%, or £1.1billion, from £4.3 billion to £3.2 billion by 2014-15.

BIS will continue to support basic skills provision so that those left behind first time around can continue to gain basic numeracy and literacy skills. Adult and Community Learning will continue to be supported and the complexity and bureaucracy that hampers providers from responding to community needs will be reduced.

To ensure that businesses have the highly skilled workforce needed to drive growth the Government will boost spending on adult apprenticeships by up to £250m by 2014-15, providing up to an additional 75,000 apprenticeship places by the end of the Spending Review period.


Science research and funding

The Government will ensure the UK remains a world leader in science and research.

To do this it will continue support for the highest value scientific research, maintaining the science budget in cash terms over the Spending Review period with resource spending of £4.6 billion a year by 2014-15. A ring fence will be maintained by the Department for Business to ensure continuity of investment in Science and Research.

Key capital projects going ahead:

  • £220 million in funding for the UK Centre for Medical Research Innovation to go ahead as planned.
  • £69 million in funding to be provided for the Diamond Synchrotron.


Partner Bodies

Reform of BIS partners will reduce the total number from 57 to 33, with 9 continuing under review. There will be back-office reform across the entire BIS network, which will cover estates, ICT, HR, finance and procurement functions in many BIS partner organisations.


HM Treasury - the Spending Review

BIS Press Notice

The Browne Review

BIS Partner Bodies

Published 20 October 2010