Just one week to prepare for Spending Round as Javid brings review forward again
Chancellor says move to hold review next week would help match spending to new government’s priorities
Sajid Javid has announced that the one-year Spending Round to set departmental funding levels for 2020-21 will be held next week as he brought forward the planned review for the second time in less than a month.
In a statement released last night, the chancellor said that the fast-tracked spending round will set departmental budgets for 2020/21, ahead of a full review in 2020. It has been followed by an announcement this morning that government plans to hold a Queen's Speech on 14 October after a controversial prorogation of parliament.
Following his appointment as chancellor, Javid said that the planned three-year Spending Review would not take place this year, and instead announced earlier this month that a one-year round would be held to “clear the ground ahead of Brexit while delivering on people’s priorities”.
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Javid said then that the review would be held in September, but revealing the conclusions at the start of the month is sooner than anticipated, with the chancellor cancelling a speech planned for today to finalise the details.
A Treasury statement said: "With apologies, the chancellor's planned economy speech due to take place tomorrow is being rescheduled. The forthcoming Spending Round will instead be brought forward in early September and will cover the themes and priorities he was due to outline," according to CSW's sister title PoliticsHome.
The one-year budgets would set out funding for spending pledges Johnson has made since coming into office last month.
Johnson has so far committed to funding the recruitment of 20,000 extra police officers – reversing cuts made since austerity began in 2010 – and giving more money to the NHS and schools.
Hinting that departmental budgets are likely to be constrained elsewhere, the Treasury said earlier this month the review would “ensure the government continues to keep borrowing under control and debt falling by meeting the existing fiscal rules”.
In its statement last night, the finance ministry said that “thanks to the hard work of the British people over the last decade, we can afford to spend more on the people’s priorities while still meeting the fiscal rules”.
Responding to Javid’s announcement, Paul Johnson, the director of the Institute for Fiscal Studies, said that Javid was likely to be able to meet borrowing rules “assuming the economy continues to grow as expected, in a world in which we get a reasonable kind of Brexit”.
However he told BBC Radio 4's Today programme that the areas highlighted by Javid for possible additional spending such as schools, NHS and the police were not the areas that had been most affected by government spending restraint since 2010.
“The bits of public services that have really suffered much worse than those areas are the justice system, prisons and courts and so on, local government, social care and further education," he added.
Institute for Government senior fellow Martin Wheatley told CSW that bringing the review forward to next week “increases at the margin the extent to which the process will consist of HM Treasury fixing a number [for departmental spending], with No.10 looking over their shoulder, rather than anything which really involves negotiation with [departmental] secretaries of state”.
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