Chancellor Rishi Sunak has today confirmed that plans for a full review of government spending have been postponed to free up departments to focus on the coronavirus response.
Instead of the planned Comprehensive Spending Review to set budgets across government from 2021-22 to 2023-24 for revenue spending and 2024-25 for capital spending has been paused, there will be a one-year settlement instead.
The Treasury said the decision prioritised the response to Covid-19, and government's focus on supporting jobs. The announcement will be made in late November.
However, multi-year NHS and schools settlements, which have already been agreed, will stay in place, as will priority infrastructure projects such as the High Speed 2 rail project and the government’s hospital building plan.
Announcing the decision, Sunak said: “In the current environment it's essential that we provide certainty. So we’ll be doing that for departments and all of the nations of the United Kingdom by setting budgets for next year, with a total focus on tackling Covid and delivering our plan for jobs."
The one-year review will also focus on providing “enhanced support” for public services to continue to fight against coronavirus, as well as investing in infrastructure priorities, the Treasury said.
Sunak added: “Long term investment in our country’s future is the right thing to do, especially in areas which are the cornerstone of our society like the NHS, schools and infrastructure. We’ll make sure these areas crucial to our economic recovery have their budgets set for further years so they can plan and help us build back better.”
The announcement also reiterated that the government will “exercise restraint in future public sector pay awards, ensuring that across this year and the spending review period, public sector pay levels retain parity with the private sector”.
The Treasury said it has been clear that plans for a full review could change due to the uncertainty of Covid-19, with the Institute for Government and the Institute for Fiscal Studies among the organisations calling for plans to be halted. This is the second major review that has been postponed and replaced by a one-year settlement, which Sunak’s predecessor Sajid Javid did last year amid uncertainly over Brexit.