The Chief Secretary to the Treasury has written to almost all Whitehall departments asking them to make savings of 10%.
Have today's public sector strikes had the desired impact or did they simply fall short?
Unions have warned that strikes by public sector workers in the row over pensions will continue following a day of walkouts and protests.
It seems the Home Office might have to find the greatest savings of all government departments.
Other big spending departments like the MoD have been partially protected.
But Theresa May's department, despite her public protestations that she could take no more, might have to save £700-800 million in 2015/16.
The Home Secretary was also linked to a campaign to replace David Cameron as Prime Minister.
The cuts demanded from all departments other than schools, hospitals and overseas aid is 10%.
For most, it is a bigger annual cut than the ones they have experienced in the current spending round - set out in 2010 shortly after the coalition was formed.
David Cameron and George Osborne never wanted or expected this spending review to happen.
They said their plan would balance the books by the next election, but their failure to deliver economic growth means there is now set to be a deficit of over £90 billion in 2015/16. That’s the reason why the Treasury is now looking for even more spending cuts and tax rises.
– Chris Leslie MP, Labour’s Shadow Treasury Minister
Yet instead of asking what’s gone wrong and what needs to be done to get the economy growing strongly, the Chancellor decided in the Budget to stick with the same old failing policies and a tax cut for millionaires.
In some respects this letter is not new because the Chancellor gave us the gloomy figures in last week's Budget. We know that he needs to save £11.5 billion in the next spending review- that is the period of 2015/16, in other word the year that starts just before the next general election.
Today Danny Alexander has written to all of his Cabinet colleagues telling them how this figure shakes down for them and it equates to a 10% cut in resource budgets, that does include overheads and it does include jobs.
– Treasury spokesman
The Chief Secretary has today written to Departments to set their planning assumptions for the 2015/16 spending round. Setting planning assumptions is a normal part of the spending round process. These are planning assumptions that allow flexibility, not final decisions.
The Ministry of Defence has been given special dispensation from the 10% cuts proposed by the Treasury, although they will have to fund a 5% cut in their resource budget in 2015/16 although that still means staff and overheads.
Danny Alexander has met all the Cabinet Secretaries in the last few days - but the letter formally setting out the governments position was only sent this afternoon.
News coming in of a letter from Chief Secretary to the Treasury Danny Alexander to government departments, demanding 10% cut in 2015/16 for those not protected.
That is a big hit for departments in 2015/16. Outside schools/hospitals/overseas aid the Treasury is asking for 10% savings from resource (day-to-day) spending.
Nurses and health care assistants are struggling to "keep their heads above water", the general secretary of the Royal College of Nursing said today after the Government announced that almost 1.4 million public sector employees will receive a 1% pay rise from next month.
Dr Peter Carter said:
– Royal College of Nursing
There is no doubt that nurses and health care assistants are really struggling to keep their heads above water financially as their pay levels are failing to keep pace with inflation.
The reality of increasing living costs means we are seeing higher numbers of our members in debt and unable to meet mortgage payments.
The announcement of a 1% increase for 2013/14 does nothing to restore the 9% gap caused by rising inflation that we have seen open up during the previous two years' pay freeze.
Staff face another year of hardship, the Unison's head of health said today, after the Government announced that 1.4 million public sector employees will receive a 1% pay rise from next month.
The union reported more health workers, including nurses, are turning to its welfare fund for help to pay for rising fuel bills, debt advice and emergency loans. Christina McAnea said:
What kind of message does it send to health workers about the value this Government places on their work? And what incentive is there for young people to join the NHS when they are so undervalued?
Freezing and squeezing pay is crushing morale and heaping financial misery on more than a million NHS workers.
At the same time, the NHS is going through a massive reorganisation and staff are dealing with job cuts, rationing and ever increasing patient numbers.
Almost 1.4 million public sector employees, including nurses, hospital cleaners, doctors and members of the armed forces, are to receive a 1% pay rise from next month, the Government announced today.
In a statement, the Treasury said:
– Treasury statement
The public sector paybill makes up over half of Departmental resource spending, so managing public sector pay continues to be central to the Government’s plans for fiscal consolidation and will help to protect jobs and services.
Some Pay Review Bodies have also made recommendations beyond base pay. The Government has considered all these carefully and in some cases decided it is not possible to take them forward. However, a number of these recommendations will be considered again at a future date.