NATIONAL
SCHE
T.C. No. 25/39
Further copies of this Circular may be obtained upon application on the usual Form of Demand, at His Majesty's Stationery Office, Shepherdess Walk, N.1.
Telephone No.: WHITEHALL 1234.
DISABLED
F. 16225
Sir,
TREASURY CHAMBERS.
Economy in Public Expenditure
28th September, 1939
27
The Lords Commissioners of His Majesty's Treasury direct me to draw your attention, as a matter of extreme urgency and importance, to the need for economy in public expenditure.
The original Estimates for the current year, together with Supplementary Estimates presented up to the beginning of August, provided for a total expenditure, exclusive of self-balancing items, to be met from revenue of £950,911,000, to which must be added a sum of £502,430,000 in respect of expenditure on defence which will be met from moneys borrowed under the Defence Loans Acts. Since these Estimates were approved, however, Parliament has made available for the purposes of the present war a Vote of Credit amounting to £500,000,000, thus bringing the total estimated expenditure so far approved for the year to a sum of £1,953,341,000.
The successful prosecution of the war will clearly involve a financial effort of unprecedented magnitude, and, as stated by the Chancellor of the Exchequer in the House of Commons on the 21st September and re-emphasised by him in the course of his War Budget speech, His Majesty's Government are deeply impressed with the imperative necessity of husbanding the financial resources of the country `so as to make them available to the utmost for the purposes of the war. Having regard to the vast total of the expenditure already provided for, to the inevitable increase in the rate of expenditure as the war proceeds and to the heavy increases in taxation which have been imposed, it is clear that the strictest economy must be exercised over the whole field of public expenditure. My Lords must therefore ask that you will undertake a careful examination of every item of expenditure by your Department, whether already sanctioned or in contemplation, with a view to eliminating all services which are not essential to meet war requirements or other pressing public needs and to securing that such services as must be carried on are administered in the most economical manner. I am also to ask that you will submit to Them at the earliest practicable date, and in any case not later than the end of October, a report, in triplicate, on the steps you have taken or propose to take to give effect to Their request and on the consequential savings in the expenditure of your Department during the current and future financial years.
My Lords take this opportunity of emphasising that They will not be prepared in any circumstances to sanction provision in the Estimates for 1940 for any new services in regard to which it cannot be clearly demonstrated that they conform to the requirements of this letter.
I am,
Your obedient Servant,
HARRY CROOKSHANK.
To the Accounting Officer.
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