Osborne eyes extra 5 percent spending cuts

LONDON (Reuters) - Chancellor George Osborne has asked most government departments if they can cut spending by an extra 5 percent this year ahead of an upcoming budget, as he seeks to erase the deficit in public finances. Prime Minister David Cameron's Conservatives unexpectedly won a slim majority in this month's national election, freeing them from their Liberal Democrat coalition partners who objected to some spending cutbacks. Osborne will set out new budget plans on July 8, and on Friday local media reported that Britain's finance ministry was asking other departments if they could find efficiency savings in the region of 5 percent, on top of planned cuts. Last week Osborne said he would seek further budget savings for the current financial year, but did not specify the scale. Asked about this on Friday, a Treasury spokesman said: "We are asking departments to identify options. There is no savings target for 2015-16." Existing budget plans require spending to fall relatively modestly this year, with steeper falls of over 5 percent a year in real terms planned for next year and 2017/18, with the aim of reaching an outright budget surplus by 2018/19. Spending cuts are not spread equally around departments, with health, schools and foreign aid protected. Many economists doubt whether the savings can be achieved without a noticeable reduction in the quality of public services. (Reporting by David Milliken; Editing by Mark Heinrich)