The Chancellor has committed to a multi-year Spending Review, to
be concluded later in the year. He has committed to setting three
years of resource (day-to-day) budgets, from 2021-22 to 2023-24,
and four years of capital (investment) budgets, from 2021-22 to
2024-25.
has, however, rowed back from the overall spending
"envelope" set alongside the March Budget, citing – quite
reasonably – the unprecedented degree of economic uncertainty.
The funding settlement announced in March was no bonanza, and
implied tight settlements for areas outside of the priorities of
the NHS, schools and the police.
Today’s announcement, which opened the possibility of a reduced
envelope and emphasised “tough choices” ahead, implies that those
non-priority areas could now be facing cuts. The Chancellor
committed to increasing overall departmental budgets in real
terms, but given the size of the NHS budget and the generosity of
its funding settlement, this tells us little about what lies in
store for other, smaller public services.
Ben Zaranko, a research economist at the Institute for Fiscal
Studies, said:
'The Chancellor has opened the door to a less generous funding
settlement for public services than the one he committed to in
March. Given the large amounts already promised for priority
areas like the NHS, schools and police, and Rishi Sunak’s
emphasis on the need for "tough choices", another round of budget
cuts for other, lower priority departments is a very real
possibility.'
