Government to freeze marketing spend

Spending on all “non-critical” advertising campaigns will be frozen as part of the Government’s £6bn cuts to public spending.

Chancellor George Osborne
Chancellor George Osborne

Chancellor George Osborne made the announcement today (24 May) as he unveiled the first round of public sector cuts aimed at reducing the £156bn deficit.

The freeze will be overseen by the new Efficiency and Reform Group, chaired jointly by the Chief Secretary to the Treasury, David Laws, and Cabinet Office Minister, Francis Maude, which will “oversee an immediate freeze” on non-critical spending on advertising, consultancy and recruitment spending.

The Group, Laws adds, will also “assist departments in renegotiating contracts.”

It is hoped that the freeze on advertising, consultancy and IT will save £1.15bn.

A spokesman for the Cabinet Office says it has yet to be decided which campaigns will be considered “critical” and a further announcement will be made shortly. It is understood armed forces recruitment campaigns will not be cut.

The Department of Health’s £700m three-year Change4Life campaign could also be spared the worst of the cuts. Health secretary Andrew Lansley made a commitment prior to the election to “sustain Change4Life and build on it”.

As part of the drive to save £6bn in the current financial year, the Department for Transport, responsible for the Think! campaign, and Department for Education, formally the Department for Children, Schools & Families and responsible for recent underage drinking campaigns, will see some of the biggest cuts in their department budgets – £683m and £670m respectively. It is not clear whether these savings include planned marketing activity.

It is likely that the coalition Government will look to make further cuts to marketing budgets beyond this freeze. The Tories and Liberal Democrats both pledged to slash Government spending on advertising and communications back to 1997 levels during the general election campaign.

The Central Office of Information (COI), the Government’s delivery body for much of its marketing and communications, saw turnover in 2008/09 hit £540m. Almost half of this was advertising. It spent £111m in 1997/98.

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