George Osborne outlines plans for an independent Office for Budget Responsibility and emergency budget on 22 June

Chancellor George Osborne has promised significant cuts to quango spending to be identified by Monday next week, as he outlined plans to set up an independent Office for Budget Responsibility.

He also announced the coalition's promised emergency budget will be unveiled on 22 June.

Osborne confirmed the coalition will look for £6bn of immediate savings over the next financial year, and has launched a review of all spending commitments made by the Labour government since 1 January this year.

He said: “The specific allocations of in-year savings will be announced a week today. These will include significant reductions to the cost of quangos. This is unprecedented speed for a spending round, but we need to get moving, and every day comes at the cost of more wasteful spending.”

Construction quangos including Partnerships for Schools and the Homes and communities Agency are among the largest spending quangos.

Osborne added that he, and economic chief secretary David Laws, had received advice from the Treasury and the Bank of England that cuts could be made immediately without damaging the UK's overall economic recovery prospects.

He identified seven areas where cuts could be made. These are:

  • discretionary areas including consultancy and travel costs
  • doubling plans for savings in IT spending
  • immediate negotiations to achieve cost reductions from the 70 major suppliers to government
  • reductions in property costs
  • restraining recruitment
  • cancelling wasteful projects like ID cards
  • cutting other lower value spending.

Treasury chief secretary David Laws has today written to all secretaries of state asking them to re-examine all spending approvals since 1 January this year and all pilot schemes. Proposals that required Treasury approvals will have to be resubmitted to the Treasury.

A statement by the coalition said: “Where projects are good value for money and consistent with the government's priorities, they will go ahead. Where they are not, it would be irresponsible to waste money on them. There is no point in continuing pilot schemes where they are too costly to implement.”

Laws, said: “We're sending a clear and strong message that we intend to do what's needed to repair our public finances and get our economy moving again. We can make these cuts while protecting the quality of key frontline services.”

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