It feels to many like a lifetime, not a meagre 12 months, since Rishi Sunak got his big break in the run up to the 2019 election, standing in for Boris Johnson at a leadership debate. One year on, and a cabinet reshuffle, fast-track budget, and global pandemic later, Mr Sunak has now delivered his first Government Spending Review.
Pitched as delivering on the priorities of the British people, the Chancellor set out the government’s focus on protecting jobs and incomes, supporting stronger public services, and delivering record investment in infrastructure – with the latter set out in more detail in the new National Infrastructure Strategy published at the same time.
On spending alone, the Ministry of Defence was perhaps the biggest winner, with the Chancellor reiterating Number 10’s announcement last week of £16bn in additional funding designed to bolster the British Navy and a new space command.
Public sector pay has been a big talking point in recent days and many public sector workers will be feeling under siege following today’s speech. Given it was only in July the government proudly promised above-inflation pay rises for public sector workers, today’s call to freeze pay for those earning over £24,000 is doubtless a bitter pill for millions of police, teachers, armed forces personnel and others to swallow. Though over one million frontline NHS workers are exempted from the freeze, critics will claim any freezes fly in the face of the ethos established over the summer as we clapped for key workers.
Education and Health – two departments that have faced intense scrutiny throughout the pandemic – have both been promised extra funding with the aim of easing pressure on services. The £3bn set aside for the NHS is there both to steer the UK through the pandemic and clear the backlog of other treatments, while the schools’ budget is in line for a £2.2bn boost.
The £100bn capital spending promised by the Chancellor will take public investment to its highest sustained level in 40 years and ensure a new National Infrastructure Bank, announced today and set to be based in the north of England from the spring of 2021, will not be a tokenistic institution but will have genuinely transformative capabilities.
Much has been made of the government’s ‘levelling up’ rhetoric, and today’s announcement sees the government put money on the table and give the policy greater meaning and substance. Mr Sunak’s new £4bn ‘levelling up fund’ – due to be administered by HM Treasury, the Department for Transport, and Ministry for Housing, Communities and Local Government – will take a ‘place-based approach’ to ensuring Britons everywhere are able to feel proud of the places they call home. Given recent controversy around the Towns Fund, it’s no surprise Anneliese Dodds used her platform as Shadow Chancellor to raise concerns about how allocations would be determined – something we can expect to be confirmed in the coming days.
Mr Sunak cited an extra £7.1bn national home building fund, coupled with imminent planning reform, to evidence the government’s support for the housing sector. A delay in implementing wide-ranging changes to the planning system seems likely, but the government will be keen to build on the momentum gained as initial lockdown restrictions were lifted and help the sector to build the homes the country so urgently needs.
Today’s spending review contained many positives for the built environment – most notably for infrastructure and housing – but the broader economic picture is challenging, with unemployment, borrowing and economic contraction at worrying levels. Mr Sunak was clear Covid-19 will leave a scar on the economy for years to come, but the government will be hoping to repair as much of the damage as it can before defending its parliamentary majority at the ballot box in 2024. The end of the transition period on 1 January and any deal with the EU – not mentioned by the Chancellor in his speech – will be a big factor in how they do.
One cannot escape the feeling there is a long winter ahead with more difficult decisions and announcements still to come. For now, the Chancellor did his best to offer cause for optimism and seemed to take criticism from opposition benches in his stride – not for the first time since stepping in for Boris at that first leadership debate.
Ben Lewis is an account executive at Camargue