Latest Public Sector News

14.03.19

Chancellor confirms three-year Spending Review imminent subject to a Brexit deal

The chancellor has announced he will launch a “full three-year Spending Review” before the summer break as long as Brexit is agreed and the “uncertainty lifted” in the next few weeks.

In his Spring Statement, Philip Hammond said the Spending Review will set departmental budgets beyond the NHS and maximise taxpayer’s money.

The chancellor said he intends to launch a full three-year Spending Review “before the summer recess” in order “to be concluded alongside an Autumn Budget.”

But this depends on a Brexit deal being completed in the next few weeks and the “uncertainty that is hanging over our economy lifted.”

Hammond said the Spending Review will “reflect the public’s priorities between areas like social care, local government, schools, police, defence, and the environment.”

Responding to the Spring Statement, chairman of the LGA Lord Porter said: “The government’s plan to publish the Spending Review alongside the Autumn Budget this year could exacerbate the funding challenges facing councils and will severely hamper their ability to plan ahead for next year and beyond.

“It is vital that the government publishes the Spending Review much earlier and ensures it genuinely secures the financial sustainability of councils.”

He said that it was “disappointing” that the chancellor had missed the opportunity to provide desperately-needed funding for local services, and added that Brexit cannot be a distraction from the challenges facing our public services.

Also announced by Hammond in the Spring Statement was a £26.6bn deal dividend if MPs vote to leave the European Union with a deal – “an economic boost from recovery in business confidence and investment.”

Hammond said he announced in the Autumn Budget that the “long but necessary squeeze on current public spending would come to and end at the upcoming Spending Review.”

He said that using the Spending Review would “give us as a nation real choice” to decide how much of the deal dividend is released and how it can be shared between increased spending on public services.

Also announced in the Spring Statement was a “game-changing” £260m funding package from the UK Government on the Borderlands Growth Deal as well as an £85m commitment from the Scottish Government.

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