CIPFA Comment: Spending Review 2020


In response to the government's one-year spending review, Karen Sanderson, Director of Public Financial Management, CIPFA, said:

"Today’s spending review presented a bleak economic outlook for the UK, with growth set to be lower for longer than the government had anticipated in the spring. 

"Substantial funding packages have been laid out for infrastructure projects and to follow through on the government’s levelling up agenda. However as always, the devil will be in the detail, particularly in relation to the £4bn levelling up fund. Those with more resources have the capacity and capability to submit stronger bids. Care will need to be taken to ensure the fund reduces regional inequalities rather than entrenches them further. While the forthcoming updates to the Green Book may support this, more detail will be needed to outline the role local authorities are expected to play in the stimulation of their local economies. We also hope to see new investment making a difference to achieving our net-zero carbon targets.

"We note that the proposed 0.2% reduction to the international aid budget roughly equates to the £4bn allocated for levelling up. Given the severity of the shock to the UK economy, and the need to reduce longer term scarring that would affect future levels of aid, we understand the need for a temporary reduction in our aid commitment. Despite this, we hope the Chancellor holds to his commitment that this is a temporary measure. Turning away from countries in greatest need does little for the image of ‘global Britain’ as we approach the end of the Brexit transition period.

“While the statement was flush with cash in some areas, others were considerably lacking. A 4.5% increase in spending power for local authorities will be absorbed by increased social care costs off the back of the pandemic, and higher costs from the rise to the national minimum wage. This announcement also did nothing to address key structural issues, including reform to local government funding and social care. The Chancellor called this a review that “sets us on a path to deal with material matters of government.” Time will tell how this materialises for the communities and families most in need of support.”


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