Cuts of more than £6 billion announced by the Government amount to less than a tenth of the “fiscal repair job” needed to the UK’s public finances, an independent economic think-tank warned.

The Conservative/Liberal Democrat coalition said the “draconian” savings would send a “shockwave” through Whitehall and kickstart the job of paying down the Government’s £156 billion deficit.

Chancellor George Osborne and his Lib Dem deputy David Laws scrapped Child Trust Funds, froze civil service recruitment, cut 10,000 university places and slashed £1.15 billion from consultants, advertising and travel, £1.7 billion by delaying or stopping major projects and £600 million from quangos.

Mr Osborne said the coalition had conducted the “fastest and most collegiate spending review in recent history” and is “getting on with the job” of stopping “wasteful” spending.

But shadow chancellor Alistair Darling warned the package would “seriously affect” businesses and students and hit jobs for young people, while unions said that it would put public services at risk. Spelling out the reductions alongside Mr Osborne at the Treasury, Mr Laws acknowledged the £6.24 billion cuts were only a “first step on what will be a long road to restoring good management of our public finances”.

“Even tougher decisions undoubtedly await us in the Budget this year and in the autumn spending review if we are to restore responsibility after the years of Labour extravagance and mismanagement of our public finances,” he said.

The Institute for Fiscal Studies (IFS) said the package amounted to less than a tenth of the measures Mr Darling’s March Budget suggested would be necessary over the coming years.

The plans set out by Mr Osborne and Mr Laws implied an average 1.2 per cent cut in departmental spending on top of the 0.5 per cent real-terms reduction already pencilled in by the former Labour administration for 2010-11, said the IFS.

But the Government’s decision to protect spending not only on the NHS, defence and overseas aid but also schools, Sure Start and education for 16 to 19-year-olds, means that unprotected areas will face estimated cuts of 3.7 per cent on top of Labour’s plans.

Development agencies’ concern

UNCERTAINTY continues to reign over Yorkshire Forward in the wake of the cuts.

Before the announcement the regional development agency (RDA) was said to be one of a number in the North which would be spared.

After all, since 1999 Yorkshire Forward has either created or safeguarded 201,689 jobs in the region.

The later statement by the Chancellor George Osborne and the report of the Chief Secretary to the Treasury, David Laws, contained no detail of which agencies would, could or should be spared the axe.

Instead England’s RDAs have been told to find £293 million in savings this year. That is more than the entire £270 million budget for a full year for Yorkshire Forward.

A spokesman for the agency said: “What is clear is that there is a need to accelerate a reduction in our overheads over the coming months.”

The same uncertainty is gripping Business Link Yorkshire, which employs 400 people and whose fate is inextricably bound to the fortunes of Yorkshire Forward.

Its chief executive Helen West said: “Once further information becomes available we will be working closely with Yorkshire Forward to understand how we are all affected.”

York's universities won't be hit

CUTS in the number of university places announced by the Government are unlikely to hit York St John University; nor are they likely to have an effect on the University of York’s expansion.

In a bid to make £200 million worth of savings in the higher education sector, the Government has allowed only 10,000 extra university places to be made available for this autumn – half the number announced by the Labour government.

Of these places, 8,000 will be for full-time undergraduates and 2,000 will be for part-time students. All the places will be for STEM subjects – science, technology, engineering and maths.

York St John University last year had 6,649 applications and this year has 8,928 seeking places – 34 per cent more.

But John Gallacher, director of finance at York St John University, said: “The cuts in university funding, with more to come, have been widely anticipated in the sector.

“Whilst reduction in additional places is unwelcome and will leave large numbers of able students with no place at university, the emphasis on extra STEM subject places means that it is unlikely to impact significantly on York St John’s current course provision.”

He said that the impact on the university’s budget on the range of cuts would become clearer in June with the next Government announcement.

A spokesman for the University of York, which has 12,000 students and 3,100 staff, said: “The Chancellor’s announcement comes as no surprise and it means that our application for additional full-time students will now be considered in the context of a smaller overall figure nationally.”

A spokesman for the University of York, which has 12,000 students and 3,100 staff, said: “The Chancellor’s announcement comes as no surprise and it means that our application for additional full-time students will now be considered in the context of a smaller overall figure nationally.”

Traders dismayed at severity of cuts

DISMAY was expressed by Susie Cawood, boss of the York and North Yorkshire Chamber of Commerce at the huge level of cuts proposed for the Government’s Business, Innovation and Skills department.

The £836 million cutbacks mean that its business arm is hardest hit of all.

Mrs Cawood said: “It is our view that it is the private sector who can deliver growth band development opportunities to get us out of the recession.

“Government support for private enterprise should remain focussed. The private sector needs support from the public sector and we were very encouraged when Vince Cable got that department.

“We urge the Government to cut more waste from Whitehall and leave the Business Innovations and Skills department alone,” she said. But she welcomed plans to use £150 million to fund 50,000 new apprenticeship places.

Alan Hall, the Yorkshire-based North Eastern regional director of the EEF which represents the manufacturing industry welcomed the government quick start in announcing cuts.

He took issue with the decision to freeze funding for frontline investments from the previous government’s Strategic Investment Fund.

MP’s firms warning

PRIVATE companies are going to bear the bulk of job losses caused by the Government’s announcement today of cuts to public sector spending. Hugh Bayley, Labour MP for York Central, warned IT businesses and the construction sector would be worst affected. He said: “The civil service always does everything it can to protect civil service jobs. It tries to find those affected jobs elsewhere, in part to save redundancy pay. It’s always easier to axe contracts with private suppliers than it is to make its own staff redundant or outsource central services.” Mr Bayley also warned the £270 million cuts planned for regional development agencies in England, excluding London, could mean a cut of £40 million for Yorkshire Forward if cuts are distributed evenly between the agencies. He said: “Yorkshire Forward is the key player in the York Central site so it could be extremely serious for York.”

Council’s challenge

Kersten England, chief executive at City of York Council, said it would be challenging to make cuts during the financial year when grants have already been allocated as people are employed and work planned on the basis of this funding. “But our approach remains the same: to do everything possible through retaining, redeployment and freezing of vacancies to avoid compulsory redundancy for permanently employed staff at the council,” she said.