Spending review is a short term effort to keep government going | Business News


At any other point in history a spending review of the kind Sajid Javid is due to unveil today would count as a major moment.

This, after all, is the moment the government formally ends austerity, showering its departments with the cash they have been deprived of for so many years. It is the moment the longest period of spending restraint in the post-war period came to an end.

And it is the first big opportunity for this new government to lay out its economic priorities since coming into office.

But, as we all know, the spending review is likely to be overshadowed by the drama playing out in parliament, and by the bigger question facing the UK economy: what is happening in Brexit?

And because no-one knows the answer to that question, the default plan – to lay out government spending for three years – has been replaced with a less ambitious aim: to establish spending totals for one year: 2020/21.

So for all the sound and fury from the chancellor today, the reality is that the spending review will not be a major vision statement, but a short term effort to keep government going.

And for many who have waited for this day – the end of austerity – for some time, that will come as a disappointment.

Before 2010 spending reviews were all about laying out policies to get government working better.

They were about setting targets for departments to improve schools or overhaul the prisons system. But in 2010 that changed: under George Osborne spending reviews were simply about cutting spending.

So this was supposed to be a return to those old days when spending reviews were all about how best money could be spent.

But instead, with a possible election looming and with big question marks over how long this government will be in place, the event will probably look instead a bit more like a mini-manifesto.

All the same, it is worth dwelling on how much things have changed in only a few months. Not long ago, for all her pledges to bring the period of austerity to an end, the Treasury remained committed to reducing the deficit and only targeted increases in spending.

Now the government looks likely to push through the biggest spending increases since the Gordon Brown era, without much in the way of new checks on whether that cash is being spent successfully.


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