Police budgets will fall by four per cent per year for the next four years.

The Chancellor of the Exchequer announced the outcome of the Comprehensive Spending Review today, reducing the public sector deficit by £83 billion by 2014/15.

Other government departments, such as health, and overseas development, will see increases in real terms, while the welfare bill, councils, policing and justice will face major challenges. The education department will face a slight budget cut but will see real term increases in respect of schooling.

George Osborne said there will be no loss in visibility of the police as cuts are made and he will also prioritise Home Office budgets on counter-terrorism, although the department’s budget will be reduced by six per cent every year. Counter-terrorism policing will see a 10 per cent cut in real terms by 2014-15.

The Ministry of Justice budget will also be reduced by six per cent every year until 2014/5, with major losers being additional prison estate and legal aid.

A four per cent cut in the policing budget equates to 17 per cent over the four years compared to 23 per cent in total for the Home Office and Ministry of Justice. However, the 20 per cent figure stated in the Spending Review document may factor in the costs of setting up Police and Crime Commissioners, the National Crime Agency and abolishing the National Policing Improvement Agency. The Home Office was unable to confirm if this was the case and is seeking to clarify the apparent discrepancy.

20 per cent cut in real terms

The Spending Review document reveals that central government funding for policing will actually fall by 20 per cent in real terms unless police authorities raise their precepts by the level forecasted by the Office of Budget Responsibility (OBR). If the presumed rise in precepts is taken into account, real term funding cuts to policing will be 14 per cent.

The policing budget is currently £9.7 billion and will fall to £8.5 billion by 2014-15 with the smallest decrease set to take place between 2012-14.

Police forces are expected to eliminate wasteful spending and reduce back office costs. The government has pledged to support this by abolishing central targets and cutting down on bureaucracy. It also expects to introduce better technology.

The released figures are for the UK parliament but in the devolved regions of Scotland and Northern Ireland, the overal budget cuts are much lower at 6.8 per cent and 6.9 per cent respectively. With a smaller overall figure, the policing budgets should see a much lower reduction in the devolved regions than those in England.

Home Secretary, Theresa May said that while her priority was to protect the public, the Home Office also had to play its part in reducing the budget deficit.

She said: “I believe that by improving efficiency, driving out waste, and increasing productivity we can maintain a strong police service, a secure border and effective counter terrorism capabilities whilst delivering significant savings.”

Shadow Chancellor, Ed Balls, said: "Theresa May has lost the argument in Whitehall which will make public safety worse off."

Despite the cuts, Mr Osborne said public spending will continue to increase from £702 billion in 2011/12 to £740 billion in 2014/15.

Spending will reduce to the levels seen in 2008 and will be put on a sustainable footing. He accepted the cuts will mean 490,000 public sector jobs will be lost but that has to be seen in the context of 178,000 jobs having been created in the last three months. Many of the jobs lost will be made through natural wastage – the average for the whole public sector is eight per cent annually – but accepted the need for redundancies.

The cuts for each department are as follows:

Communities and Local Government: -27%
Business, Innovation and Skills: -25%
Culture, Media and Sport: -24%
Home Office: -23%
Ministry of Justice: -23%
Transport: -21%
Energy and Climate Change: -18%
Ministry of Defence: -7.5%
Health (in England): +1.3%
International Development: +37%
Education: -3.4%