The Ministry of Justice has denied that it is on course to overspend by £1bn on the budget agreed with the Treasury in 2015, as analysis by a thinktank suggests that the department must brace itself for bigger cuts than anticipated following last week's Budget.
According to a departmental overview published by the National Audit Office, the ministry ihas overshot the target set in the 2015 spending review by £1.1bn and must reduce its spending by £500m.
The NAO says that the ministry 'stated that the spending review 2015 was based on better managing demand and being able to raise more revenue through charging for services. Both of which have been challenging for the ministry. Much of the spending increase since 2015-16 covers spending on major reform programmes including courts, prisons and probation, which are expected to lead to significant savings'.
However, a spokesperson for the ministry told the Gazette that the review 'does not take account of additional money given to the department by the Treasury since 2015. Forecast spending this year is in line with our budget'.
The ministry says that the report does not account for extra funding the department received in the 2016 autumn statement or cash provided by the Treasury through supplementary estimates. In 2016 the Treasury said it would hand over up to £500m of additional funding to recruit 2,500 extra prison officers and fund 'wider reforms' to the justice system.
The ministry says the spending plans for 2018/19 set out in the NAO's report are consistent with the figures published in the department's main estimate in April and are in accordance with parliamentary expectations and budgeted spend for this financial year.
Last week the chancellor of the exchequer, Philip Hammond, signaled that austerity is ending, but this failed to manifest in Treasury generosity towards the justice system.
Accompanying documents to the chancellor's Budget showed that the day-to-day budget of the Ministry of Justice will shrink from £6.3bn in 2018/19 to £6bn in 2019/20. The capital budget will fall from £600m in 2018/19 to £400m in 2019/20 - and just £100m in 2020/21. Law officers’ departmental spending remains at £600m.
Expenditure in future years will depend on next year’s spending review, but the portents are bleak. Analysis by think tank the Resolution Foundation suggests that unprotected departments including the MoJ must brace for per capita real-terms budgets 3% lower in 2023-24 than 2019-20. If cuts are shared equally across these departments, that would amount to a massive real-terms cut of 48% at the MoJ since 2010.
Hammond has pledged to fund the cost of building a new prison at Glen Parva in Leicestershire. An extra £30m will be spent on prisons this financial year there will be a further £15m for court building maintenance and security. The government has also committed to a Law Commission review aimed at simplifying rules governing marriage ceremonies in England and Wales.