Government departments prepare to cut spending by 40%

Government marketers are bracing themselves for heavy cuts to their advertising budgets after the coalition government asked departments to plan for possible spending cuts of up to 40%.

The new proposed cuts are much heavier than the expected public spending cuts of about 25% percent in most areas, but the government says that the reports are only the worst-case scenarios and may not be as hard-hitting when they come to being actioned.

A Treasury spokesman says departments have been asked to look at a range of possible cuts and that the 40% level was only one option that would form the basis of negotiations in the coming months.

“These planning assumptions are not final settlements and do not commit the Treasury or departments to final settlements,” the spokesman said. “These assumptions will be negotiated.”

Only the education, health and defence ministries would be spared such unprecedented levels of spending cuts. The proposals for how to cut 40% of spending must be finalised by the end of the month, although there is no certainty they will form part of official government budgets due to be announced in October.

Last month, the Cabinet Office sent government advertisers and department heads a guidance document enforcing the immediate freeze on all non-essential government marketing, unless permission is sought from the relevant personnel.

The guidance excludes the following formats of advertising:

  • Recruitment advertising by the armed forces
  • Information about paying taxes
  • Advertising and marketing by museums and galleries
  • Activities where government has a legal duty to provide people with information such as changes to legislation or public services
  • Activities where there is unequivocal evidence that campaigns deliver measurable benefits relating directly to immediate public health and safety

Exceptions for essential campaigns may also be approved, on a case-by-case basis, providing the information is critical to the effective running of the Government.

The document warns that the new restrictions come into effect immediately and cover advertising and marketing activity across all central government departments, agencies and non-departmental public bodies. It applies to all paid for new advertising and marketing spend for the remainder of the financial year 2010-11, across all media formats.

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