On 20 October 2010, the Chancellor presented the government’s Spending Review which fixes spending budgets for each government department for the next four years. The plans include a reduction of 23 per cent, or around £2 billion, in Ministry of Justice spending over the period. Savings are to be achieved through "reforming sentencing to stem the unsustainable rise in the prison population, using innovative approaches to reduce reoffending and resolving more disputes out of court".

The report refers to government consultations, published in June, seeking views on whether to close 54 county courts and 103 magistrates' courts which are said to be under-utilised and inadequate, including the Mayor's and City of London county court. There are plans to reform the court system "to provide a more efficient service, using mediation and alternatives to court where possible" and "ensuring that court is seen as a last resort, rather than the default option". Spending on new IT and court projects will be limited to "essential capacity".

Presentation of the Spending Review followed the publication on 14 October 2010 of which public bodies would be abolished or merged in the so-called "bonfire of the quangos" which was flagged in the coalition agreement. Overall 192 bodies are to be scrapped and 118 merged. The main bodies relevant to civil litigators have however been retained, in particular the Civil Procedure Rules Committee, the Civil Justice Council, the Law Commission and the Advisory Committee on Civil Costs. These were judged to perform technical functions which should remain independent of government.

In September the Lord Chancellor also outlined plans to create a unified judiciary in England and Wales, bringing together Her Majesty's Court Service and the Tribunals Service, under the overall leadership of the Lord Chief Justice. According to the Ministry of Justice Business Plan, the government will consult this autumn on the benefits of creating a new integrated agency, with the launch of the agency expected for April 2011.