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THIS DOCUMENT IS THE PROPERTY OF HIS BRITANNIC MAJESTY'S GOVERNMENT

Page 456pointed for the Cabinet.

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October 194 age 456 of 1097.

SECRET

C.P. (49) 216

26th October, 1949

CABINET

Copy No. 31

GOVERNMENT EXPENDITURE

MEMORANDUM BY THE PRIME MINISTÉR

In my memorandum of 4th August (C.P. (49) 170), I asked all Ministers in charge of Civil Departments to undertake forthwith a searching scrutiny of the expenditure for which they are responsible. The reports made by Ministers in response to that memorandum provided the material for the proposals subse- quently considered by the Economic Policy Committee for the reduction in the rate of Government supply expenditure, as part of the programme of measures to combat inflation. Decisions were taken by the Cabinet on 21st October (C.M. (49) 61st Conclusions, Minute 2) and I announced them to the House of Commons on 24th October.

2. I now ask Ministers in charge of Civil Departments to press forward with the action required to give detailed effect to the Government's decisions.

3. The reports rendered by the Civil Departments in response to my memo- randum of 4th August contained proposals for measures of economy under the two heads mentioned in paragraph 3 of that memorandum-(a) curtailment of services which are not essential to major Government policy, and (b) more econo- mical administration of policies which must be retained. Now that decisions have been taken on the economy programme as a whole, action can be taken on the proposals made by Departments under these heads, and I ask the Ministers con- cerned to give effect to them at once, subject to the following provisos :-

(i) I recognise that in a number of cases conditions are attached to the measures proposed, and that in those cases the economies cannot be secured till the conditions have been cleared. For example, some measures depend upon negotiation with local authorities or public corporations. Others are proposed by one Department but require the agreement or participation of another. I ask all the Departments