Spending Review 2019 – A bumpy start

If you could manage to sit through the awkward dressing down of the Chancellor by the Speaker of the House for repeatedly veering off topic and discussing Brexit, the Spending Review 2019 had some interesting funding announcements in areas that the Tories have, in recent years, been accused of neglecting.

The main headline was undoubtedly ‘turning the page on austerity and beginning a new decade of renewal’ and he cemented this by announcing the fastest increase in day-to-day spending for 15 years. He also announced a reduction of 9% of the budget deficit to 1% of GDP and the need to focus on productivity which will stimulate growth.

Our focus is on the investments that will most affect local communities and local government and whilst there are some positive investments coming forward in these areas, there are some gaps – such as social care – for which real reform are needed. So, did the Spending Review go far enough?

Brexit

The Chancellor announced a further £2 billion for Brexit delivery and no-deal preparedness on top of the £2.1billion of funding already promised. He provided some detail – it will provide more Border Force staff and transport infrastructure at ports, which will be welcomed by local authorities such as Kent who will be impacted by border changes. What is unclear is what of this funding will be provided directly to councils, who have been requesting further financial support for their business continuity planning.

Transport and Infrastructure

Javid announced funding of £3.6 billion for the new towns fund as a means to invest in our regions and places and to improve transport links across the county. An additional £200 million was also committed to transform bus services across the country including the funding of ultra-low emission buses and the trialling of new on-demand bus services.

Javid announced that further details would follow about the Government’s new infrastructure strategy – making reference to Northern Powerhouse Rail, so this is an area to keep an eye on in the following months.

Social Care

£1.5 billion of new funding was allocated to social care next year and Javid hinted at further reforms which the Prime Minister will announce in due course. This extra investment is the minimum amount councils requested to save the adult social care system from collapse. This will very much be a temporary fix for some authorities and the proof in the pudding will be the further reforms hinted at by the Chancellor.

Funding of £54 million has also been committed to reduce homelessness and rough sleeping which is a real-terms increase of 13%. Homelessness has become a real issue, especially in the Capital, so this announcement is welcome.

Education

Per pupil investment is rising and is on track to reach £4,000 per pupil by next year. Investment also means that teachers’ starting salaries can rise to £30,000 by 2022/23 with the view that this will attract more talent to the sector. An 11% increase on spending compared to last year for children and young people with special educational needs is also on target. The government has announced a £400million increase in funding for 16-19 education funding next year and an early-years spending increase of £66 million to increase the hourly rate paid to maintained nursery schools and providers of the Government-led free childcare programme.

Policing and Crime

Javid announced a 6.3% increase in real-term Home Office spending – the biggest increase in 15 years and no surprise given his positive stint as Home Secretary. The announcement included a pledge of £750 million to recruit 20,000 new police officers, with an extra £45million this year so the first 2,000 officers can be in place by April next year. He also announced funding to tackle online child sexual exploitation and an increase in the budget for the Ministry of Justice to improve the justice system and face the new challenges around knife crime and the threat from terrorism.

Environment

£30 million has been pledged to improve air quality (which will work well alongside the additional investment in low emissions buses) and another £30 million committed for biodiversity including the expansion of the Blue Belt programme (marine species protection programme).

In his lengthy opening remarks, Javid warned that the UK has underinvested in infrastructure and touted this as his main priority with his economic plan to ‘rebuild our national infrastructure’. Arguably however, his announcements did not embody this commitment. Whilst investment in our bus services and in the new towns fund is welcome, more had been expected from the Review. Further announcements will of course be made in due course and Cratus will be monitoring these over the coming months.

The commitments to further funding for social care will only provide a temporary relief for local councils who are massively feeling the stretch in their adult social care budgets. With the promise of reform made, it is important this Government can deliver the reforms needed to rebuild trust and repair the relationships with Local Authorities who are on the sharp end of these funding decisions.