Spending review dropped amid Covid uncertainty

Spending review dropped amid Covid uncertainty

The government has abandoned its long-term Comprehensive Spending Review amid economic uncertainty caused by the Covid-19 pandemic.

Chancellor Rishi Sunak will instead set out a one-year review in late November.

The Treasury said it was “the right thing” at the moment to “focus entirely” on protecting jobs and responding to the crisis.

Economists had warned that the pandemic meant setting longer-term spending targets would prove difficult.

In its latest figures, the Office for National Statistics said the UK economy was still 9.2% smaller than in February, before lockdown began.

And the government’s net borrowing estimate for September was £36.1bn – the third-highest figure since records began in 1993.

Mr Sunak said: “In the current environment it’s essential that we provide certainty. So we’ll be doing that for departments and all of the nations of the United Kingdom by setting budgets for next year, with a total focus on tackling Covid and delivering our Plan for Jobs.

“Long-term investment in our country’s future is the right thing to do, especially in areas which are the cornerstone of our society like the NHS, schools and infrastructure.”

Last month, Mr Sunak scrapped plans for an autumn Budget in favour of the review, which sets out how much each government department can spend and does not include changes to taxation.

The review had been due to set departments’ resource budgets for 2021-2 to 2023-4 and their capital budgets for 2021-2 to 2024-5.

The devolved administrations’ block grants were also due to be set for 2021-2 to 2024-5.

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