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Spending Review 2010: PLC coverage
Practical Law UK Legal Update 1-503-6574 (Approx. 5 pages)
Spending Review 2010: PLC coverage
by PLC Public Sector
| Published on 20 Oct 2010 • England, Wales |
On 20 October 2010, the Chancellor of the Exchequer, George Osborne, set out the government's four-year public spending plans in its Comprehensive Spending Review 2010 (free access).
Speedread
On 20 October 2010, the Chancellor of the Exchequer, George Osborne, set out the government's four-year public spending plans in its Spending Review 2010 (SR 2010).
The decisions taken in the SR 2010 are intended to support:
- Economic growth.
- Fairness through simplifying the welfare system and facilitating social mobility.
- Public sector reform by redistributing power from central to local government and increasing diversity of provision in public services.
This update provides links to PLC coverage of the SR 2010 and its implications for various sectors.
Background
On 20 October 2010, the Chancellor of the Exchequer, George Osborne, set out the government's four-year public spending plans in its Spending Review 2010 (SR 2010).
The June 2010 Budget set out the overall level of public spending for the four years from 2011/12 to 2014/15. The SR 2010 now sets out the allocation of these resources across all government departments, according to the government's current priorities. The budgets announced for each department are fixed but departments have the power to decide how best to manage and distribute this money within their areas of responsibility.
The June 2010 Budget announced that public spending, and not taxation, was where the most dramatic reforms to reduce the deficit lay, stating that there would be a reduction in public spending of £83 billion by the end of this spending review period (when inflation was taken into account). For more information on the June 2010 Budget, see PLC's landing page, Budget 2010.
The decisions taken in the SR 2010 are intended to support:
- Economic growth.
- Fairness through simplifying the welfare system and facilitating social mobility.
- Public sector reform by redistributing power from central to local government and increasing diversity of provision in public services.
Comment
Growth and tax
The SR 2010 forms the most significant part of the government's attempts to reduce the deficit. However, the need for growth in the UK economy and increased revenues from taxation are also key to the chances of the government success, in particular there has been much discussion of the ability of the private sector to provide employment to the estimated 500,000 public sector employees that are at risk of being made redundant as a result of the proposed cuts. In this regard, the government has committed to supporting employees facing redundancy in making a successful transition to the private sector through Jobcentre Plus.
It has also been confirmed that the Office for Budget Responsibility has been asked to publish its autumn forecast on Monday 29 November 2010. The Chancellor will then make a statement to the House of Commons responding to this report. For more information, see Legal update, Chancellor's autumn statement not before 29 November 2010 .
Equality issues
Alongside the SR 2010, HM Treasury has produced an overview of the impact of Spending Review 2010 on equalities (see HM Treasury, Overview of the impact of Spending Review 2010 on equalities), which sets out how the Treasury has complied with its legal duty to consider the impact of its decisions on men and women, people from ethnic minorities and people with disabilities.
The June 2010 Budget announcement was previously the subject of a judicial review application on the basis that HMT had failed to conduct a gender equality impact assessment (see Opinion, The Equality Act, impact assessments and a challenge to the Budget).
Next steps
As has been widely commented the true impact of the SR 2010 will not be fully known until the departmental budgets are allocated, with the government making it clear that individual employers in the public sector will determine the workforce implications of spending settlements in their areas.
The government has set out its next steps in its Executive Summary stating that, later in 2010, each government department will be required to publish a business plan setting out details of their individual reform plans, including:
- Their vision and priorities to 2014-15.
- A structural reform plan, which will include actions and deadlines for implementing reforms over the next two years.
- Their contribution to transparency, which will include the key indicators used to show the cost and impact of public services and departmental activities. The government will consult on this to ensure that the "most relevant and robust" indicators are agreed in time for the beginning of the SR period in April 2011.
The government will also publish a reform White Paper early in 2011.