British Govt : New Measures to limit Public Spending

Britain is to unveil new rules to further limit public spending as part of the government’s efforts to meet its austerity targets.

Under the new rules, government departments will have to set aside 5 percent of their annual budget to cover unexpected expenses in a bid to discourage them from asking for more money from the central government when emergencies arise.

Meanwhile, government departments will have to report their books to the central treasury each month to improve financial management.

Treasury Minister Danny Alexander is to talk about the new rules in a speech to the Institute of Fiscal Studies think-tank on Monday.

The new rules, due to take effect this year, are intended to help Britain keep control of its finances, retain the credibility of world markets and hold down its low borrowing costs, according to a statement released by the minister’s office.

The coalition government has declared to stick to its austerity plan set in 2010 when it came into office, despite criticism that the austerity plans are worsening a fragile economy.

Official data on Britain’s economy for the first three month this year will come out on Wednesday, which will reveal whether or not Britain is in recession following a 0.3-percent contraction in the last quarter of 2011.