Another £10bn needs to be slashed from welfare bill, says George Osborne A further £10 billion will need to be slashed from the welfare bill by 2016 to protect other departments from deeper cuts, George Osborne warned today. The Chancellor paid tribute to Iain Duncan Smith's drive to bring down the costs of pensions and benefits since the coalition came to power. But he cautioned that the welfare budget was still on track to account for a third of all public spending in future. "If nothing is done to curb welfare bills further, then the full weight of the spending restraint will fall on departmental budgets," he said. Analysis published by the Treasury suggests that if welfare spending remains on its current course, other departmental expenditure will have to shrink by 3.8% in both 2015/16 and 2016/17. That compares to a 2.4% reduction in the current spending review period. However, the Children's Society insisted cutting welfare further would leave the poorest families facing an "even bleaker" future. "Instead of producing a roadmap to meet its commitment to end child poverty by 2020, the Chancellor is considering slashing a further £10 billion from the welfare budget," interim chief executive Shan Nicholas said.