Chancellor cancels three-year spending review to deal with Covid crisis

Chancellor Rishi Sunak says Spending Review will focus on tackling Covid-19 and supporting jobs.

The chancellor Rishi Sunak has scrapped the government’s three-year spending review for the rest of parliament to allow more time to focus on coping with the developing second wave of the Covid-19 pandemic.

The government has instead announced that a one-year spending review will conclude by the end of November, setting departments' resource and capital budgets for 2021-22 and devolved administration’s block grants for the same period.

Ministers say that multi-year NHS and schools’ resource settlements will be fully funded, as will priority infrastructure projects – describing hospital building and HS2 as examples of the kind of capital projects which require multi-year capital allocations.

The government says it has been clear that it would keep plans for the spending review under review given the unprecedented uncertainty of Covid-19 and, while the government would have liked to outline plans for the rest of this parliament, they say the right thing is to focus entirely on the response to Covid-19 and supporting jobs.

The spending review will focus on three areas:

  • Providing departments with the certainty they need to tackle Covid-19 and deliver the government’s Plan for Jobs to support employment;
  • Giving vital public services enhanced support to continue to fight against the virus alongside delivering first class frontline services; 
  • Investing in infrastructure to unite and level up the country, drive economic recovery and Build Back Better.

Ministers are claiming the review will confirm multi-year capital spending for key programmes where certainty is needed to ensure no time is lost in delivery. Chancellor Rishi Sunak, said: “In the current environment its 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.

“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.”

Ministers say the precise date for the review will be confirmed shortly, but it will be in the last weeks of November.

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