COI warns that government ad budget could shrink by 50%

Government advertising expenditure could fall “by at least 50%” during this financial year with only essential campaigns unaffected, the Central Office of Information has warned agencies in a letter seen by Marketing Week.

The letter, which is signed by Peter Buchanan, deputy chief executive of the COI, says the coalition government is looking to achieve savings of around £160m in its marketing and communications expenditure and warns that a spending freeze “will take effect immediately and will mean a reduction in the volume of work going through COI” until the end of 2010/11 financial year.

It goes on to emphasise that only “essential marketing campaigns” will continue as normal, which includes providing people with information such as changes to legislation or public services or information that is deemed critical to the effective running of the country.

All other campaigns must provide “unequivocal evidence” that they deliver measurable benefits relating directly to immediate public health and safety.

The move comes as marketing industry leaders called on the coalition government to provide greater clarity on its definition of “essential” campaigns after the Liberal-Conservative alliance said it will freeze spending on all “non-critical” marketing.

The freeze is being overseen by the new Efficiency and Reform Group, chaired jointly by the Chief Secretary to the Treasury, Danny Alexander, and Cabinet Office Minister, Francis Maude.

The COI saw turnover in 2008/09 hit £540m. Almost half of this was advertising. It spent £111m in 1997/98.

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