Spending Review: What Did The Chancellor Announce?
Key points at a glance ...
Posted by Roger Eddowes on 26/11/2020 @ 8:00AM
Yesterday afternoon, Chancellor Rishi Sunak set out what the Government is going to spend on health, education, transport and other public services in 2021. This is not a budget as there was no definitive talk about taxation ...
The spending review is for one year only rather than the normal three!
As we know, all too well, the country has been battling the Coronavirus Pandemic this year, and that has impacted on the levels of Government borrowing. A usually fiscally prudent Conservative Chancellor had to throw caution to the wind this year.
"As a result, borrowing is well over £280 billion this year!"
However, the Government has been very generous in an attempt to support the economy through two lockdowns and a tiered summer. He supported both businesses and employees, as well as offering additional funding to local authorities and the devolved governments, hard decisions had to be made.
Here are the main points from his announcement:
Millions of public sector workers will have their pay frozen in 2021-2022
However, millions of NHS workers, as well as public sector workers earning less than £24,000 will still get increase
The economy is expected to shrink by 11.3% by the end of this year
Unemployment will be around 7.5% by next spring, meaning over 2.6 million people out of work
The Overseas Aid budget is to be cut by about £4bn to 0.5% of GDP for the next couple of years
A £4bn 'levelling up' fund will be used for upgrading local infrastructure across the UK
The Chancellor has said that in addition to the £280 billion already spent, the Government has committed to a further £55 billion in 2021 to support the recovery. This includes programmes and incentives to individuals to help them find work. He also predicted that because of the Coronavirus pandemic, the long-term outlook for the economy is a 3% shrinkage by 2025.
I'll blog more about the specifics as further information is released.
Until next time ...
ROGER EDDOWES Business Godparent
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Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.
Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.
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