Spending Review 2019

Chancellor Sajid Javid has outlined his financial priorities in his first Spending Review this week. It marks the first economic update since the Spring Statement in March and has been said to formally signal the end of austerity. Will Sajid Javid and his colleagues actually be around to deliver on these promises in 2020/21?

With the government promising an additional £13.8 billion in day-to-day spending, the Review marks the fastest planned growth for the UK in 15 years. However, with the potential for an election very likely, these policy priorities are beginning to sound hollow. What we are hearing are manifesto promises, rather than actual spending pledges. Indeed, the bulk of spending – including the additional billions for schools, the NHS and funding for 10,000 more prison places – has already dripped out of Number 10 over the past month. While there is an interesting £30 million sweetener to progress decarbonization schemes – another certain crowd pleaser – it is still difficult to know what the real long-term additional priorities of the administration might be. 

Certainly there is very little room for manoeuvre for wider spending increases, and the large down payment of an additional £1 billion on social care alone highlights how difficult it will be to secure funding for other local government priorities. The £241 million promised to high streets and £54 million on homelessness is very small given the bigger pot of money announced today. 

Despite this, it is nice to hear some consistency in messaging around long-term investment in infrastructure, particularly the decision to fund the Manchester to Leeds rail upgrade. Key to UK growth and prosperity, the suggestion that the fiscal framework might be overhauled to fund infrastructure is promising, as is the plan to publish the national infrastructure strategy this year. 

But the real question remains: will Sajid Javid and his colleagues actually be around to deliver on these promises in 2020/21?

Simon Rawlinson

Partner - Head of Strategic Research and Insight +44 (0)20 7812 2319 Ask me a question
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