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Posted on:
4th September, 2019

Chancellor’s first Spending Review lays foundations of “new economic plan”

Chancellor Sajid Javid has set out the Government’s spending plans for the first year outside of the EU, 2020/21. The Chancellor said that this Spending Review paves the way for “a new economic plan for the years ahead."

Chancellor’s first Spending Review lays foundations of “new economic plan”

The Chancellor said no department will have its spending cut next year, confirming that every government department will have its spending increased “at least in line with inflation.” The key points for LEPs are highlighted below:

General

  • A further £2bn is to be made available for Brexit delivery next year.
  • Chancellor said the real increase in day to day spending for public departments for 20/21 will rise to £13.8bn.
  • Ahead of the budget later this year, the Chancellor will “review the fiscal framework…to meet the priorities of today”
  • First priority is to rebuild infrastructure. That means faster broadband, better signal coverage, cleaner energy, better transport, more trains and buses, and a push on the frontiers of science and technology. In short an “infrastructure revolution” across the UK. The Chancellor said a new National Infrastructure Strategy will be published in the autumn.
  • A £6.2bn increase in NHS funding next year, which includes investment in new Artificial Intelligence technologies.
  • Councils will have access to new funding of £1.5bn for social care next year.
  • At the heart of the new economic plan is the need to “level up” across this country. Confirmed £3.6bn for New Towns Fund – investment to regions and places. Better transport links across country is crucial part of levelling up, already allocated £13bn for transport across the North. Full details will be published in the National Infrastructure Strategy due in the autumn.

Communities, Housing, Local Government

  • MHCLG will see a 2.7% real terms increase to the department’s resource budget from 2019-20 to 2020-21.
  • MHCLG gets a total of £241 million from the Towns Fund in 2020-21 to support the regeneration of high streets, town centres and local economies.
  • There will be continued funding for the Midlands Engine and Northern Powerhouse.

Transport

  • Chancellor commits £1.1 billion funding to ensure the Strategic Road Network runs safely and smoothly.
  • Over £200 million of increased funding is available to transform bus services, making best use of technology and promoting decarbonisation. Further details will be announced “in due course”
  • There is continued support for the development of major transport projects, including pushing on with work on the Leeds to Manchester route of Northern Powerhouse Rail, and driving forward East West rail links in the Oxford to Cambridge Arc.

Business, Energy, Industrial Strategy

  • There’s an additional £30 million available to accelerate progress on developing decarbonisation schemes that will help to move the UK towards its Net Zero greenhouse gas emissions target by 2050. Further detail on how the UK will make progress towards this target will be set out in the National Infrastructure Strategy this autumn.
  • Support for small businesses to grow, including providing access to finance via the British Business Bank.
  • £191 million of funding to support delivery of Brexit-related activities, including the development of a UK Global Navigation Satellite System option and delivering business stability for company law and audit.
  • The government is committed to increasing levels of research and development (R&D) to at least 2.4% of GDP by 2027. In the autumn, the government will set out plans to significantly boost public R&D funding, provide greater long-term certainty to the scientific community, and accelerate its ambition to reach 2.4% of GDP.

Digital, Culture, Media, Sport

  • Continued investment in the UK’s world leading digital economy to drive growth and innovation, with programmes to support the UK tech sector and help people to stay safe online.
  • Continuation of the Discover England Fund to promote inbound tourism and showcase visitor destinations across England.
  • Further detail on how the UK will make progress towards its targets for full fibre broadband will be set out in the National Infrastructure Strategy this autumn.

Environment, Food, Rural Affairs

  • As part of the 25 year plan for the UK natural environment – DEFRA is to get £432m of funding.
  • More than £30 million increase in funding for air quality.
  • An additional £30 million for terrestrial and marine biodiversity measures, to support the maintenance and restoration of vital habitats for wildlife, progress nature-based solutions for climate change mitigation, and deliver the 25 Year Environment Plan.

Trade

  • Additional funding to deliver an ambitious Free Trade Agreement programme.
  • Funding for the new trade policy framework as the UK leaves the EU.
  • £19m of funding for 1,000 diplomats and staff for the DIT overseas network, regional and sector teams and programme of activities to support UK businesses around the world, break down barriers to trade and strengthen the UK’s leading position as a destination for inward investment.
  • £60m to extend the GREAT campaign for next year.

Education and Skills

  • Commitment to increase the schools budget by £7.1 billion (£4.6 billion above inflation) by 2022-23. The minimum per pupil amount for 2020-21 will increase to £3,750 for primary schools and £5,000 for secondary schools.
  • Further Education gets £400m increase in 16-19 education funding next year.
  • Youth services. Chancellor has asked DCMS to develop proposals for a new ‘youth investment fund’ to set out plans for more youth centres and services across country.

For a full detailed breakdown of the Spending Review please see here.