Amidst the political debates, the UK’s new Chancellor Sajid Javid today announced new departmental spending limits for the upcoming financial year.
The basic facts show new spending of nearly £14 billion across a range of public services. The spending is particularly focused on schools, social care and policing, and pledges for healthcare were re-affirmed and slightly enhanced. There is money to ensure we continue to meet commitments on defence, to relieve some of the pressures on prisons and to ramp up further no deal Brexit planning.
While the spending decisions clearly make a difference, the real news is not these particular announcements. The important story is that a “spending review” – which typically covers 4 to 5 years of spending commitments – has been downgraded to a “spending round” covering the immediate needs of public services in the very short term. A longer-term, more thorough spending review is now postponed until 2020.
Spending reviews are one of the most important pillars of public service planning: they provide some certainty to departments and other public bodies about their revenue and capital budgets over a significant period of time. They help departments direct spending to where the benefits are greatest – not just in the short-term, but also over longer timescales with less focus on immediate political pressures.
The longer-term focus also means that evidence can be generated about the costs and benefits of new public spending, which in turn can help shape future policy priorities for revenue and capital spending in each area of public service provision.
Having this longer-term clarity is important. Next year, the Chancellor – whoever that may be – will hopefully be in a position to announce a spending review that provides it.
Frontier works widely across the public and private sectors to support evidence-based decisions about tax and spending commitments.
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