The Chancellor of the Exchequer Sajid Javid has announced the government’s spending plans for 2020-21 in the Spending Round on 4 September. There will be a fuller Spending Review in 2020.
- No significant changes to main tax, VAT, business rates or self-employment
- NHS budget has already been set – up £6.2bn next year (more below)
- The government will consult on a 2% council tax precept (new tax) to be used to raise £500m towards social care (more below)
- Inflationary budget elsewhere to reflate the economy (post-Brexit)
- £241m will go to councils for regenerating high streets
- For the first time since 2002 no government department will face a cut
The Treasury will work with the Bank of England “to coordinate a fiscal and monetary response for the UK economy post Brexit” and to “review our fiscal framework to ensure it meets the economic priorities of today, not of a decade ago”. This is code for breaking with the three previous governments’ spending and borrowing rules.
This, and the post-Brexit war chest the Treasury had been accumulating, will enable the government to reflate the economy by an additional £13.8bn (including £1.7 for capital) next year – the fastest increase in real-terms for 15 years.
£2bn will provide core funding for government departments on Brexit over 2019/20 and 2020/21 – more support for business readiness and to prepare Britain’s ports for a no deal.
The NHS will receive £6.2bn including more investment in training and professional development for doctors and nurses. Nurses, midwives and allied health professionals to receive a £1,000 over 3 years personal development allowance (optometrists and DOs are not classified as AHPs). Also includes £2bn new capital including for upgrades to 20+ hospitals and £250m for artificial intelligence.
An extra £1.5bn will go to local councils for social care. This is the minimum councils said was necessary to prevent parts of the adult social care system collapsing next year and has been widely described as a ‘sticking plaster’. It will not make the NHS bed-blocking problem worse, but it doesn’t solve it either. The government’s long promised green paper on social care funding has still not appeared. An additional £54m will go towards tackling homelessness and rough sleeping.
An initial £750m increase to fund 20,000 new police officers. This will part-restore the 20,000 officer posts cut since 2010.
The Ministry of Justice budget will rise by 5% by 2020/21, with an extra £80m for the Crown Prosecution Service, combined with 10,000 additional prison places to accommodate the productivity increase.
The fund to protect places of worship will be doubled.
Schools will receive £7.1bn increase over three years. The aim is for every secondary school to receive £5,000 per pupil and every primary school £3,750 per pupil from 20-21. £700m of this will support children with special educational needs.
Bus services are provided with £200m to fund low-emission vehicles and trials of on-demand services, to “put the wheels back on the great British bus”.