New UK Government and a one-year spending review

Whilst media headlines have naturally focussed on the new prime minister’s plans for Brexit, the formation of a new government also has implications for local government funding

It has now been confirmed that there will be a one-year spending review covering 2020-21, and a multi-year spending review will be held in 2020

The new Chancellor (Sajid Javid) announced on 8 August 2019 that there will be a one-year Spending Review covering 2020-21, with a multi-year SR held in 2020.

  • The one-year spending review will be announced in September 2019. No specific date has been given as yet for the review. It replaces the three-year spending review that had been planned for Summer 2019.
  • The RSN currently assumes that there will be an Autumn Budget later in the year (usually late November) to deal with taxation and fiscal decisions. Additional funding could be announced at this point.
  • The period covered by the next spending review has not be confirmed. Spending reviews are usually between 2 to 4 years. According to the Fixed Term Parliaments Act 2011, the next scheduled general election is in May 2022, barely one year into the multi-year spending review.

Rishi Sunak (Chief Secretary to the Treasury) announced that the government’s priorities in the spending review will “Invest in the priority areas of schools and policing, while delivering our promises on the NHS, defence and Official Development Assistance (ODA).”

The new government is giving strong indications that it will increase public spending and investment. Paul Johnson (from the Institute of Fiscal Studies) wrote recently, “even in normal circumstances, austerity would be ending about now. The deficit is historically low”; “and were Philip Hammond still Chancellor, I think we’d be seeing quite significant spending increases… £15 billion or even £20 billion on top of the billions already allocated to the NHS”.

With fairer funding being a key concern the RSN will be keeping a keen watch on the situation and we will react accordingly to any further developments. 

Central Government has historically and systematically underfunded rural areas giving them less grant per head than urban areas – despite the fact that it costs more to provide the services. Rural residents earn less on average than those in urban areas and pay more Council Tax for fewer local government services. Government policy, implicitly, is that council services in rural areas are more reliant on funding through council tax than their urban counterparts. We demand fairer funding for all public services serving rural areas. Any changes in a spending review has to address this situation.


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