Spending Review: Key points from Rishi Sunak’s statement

Chancellor Rishi Sunak

image copyrightReuters

Chancellor Rishi Sunak has set out what the UK government will spend on health, education, transport and other public services next year.

In a statement in Parliament, he also briefed MPs about the state of the UK economy and the latest forecasts for the UK’s public finances, which have been battered by the Covid pandemic.

Here are the main points.

  • Millions of public sector workers will see their pay frozen next year
  • A million NHS workers and those earning less than £24,000 will still get increase
  • The UK economy is expected to shrink by 11.5% this year
  • Unemployment is expected to reach 7.5% next spring, with 2.6m people out of work
  • A new £4bn “levelling up” fund will pay for upgrading local infrastructure


image copyrightPA

  • Millions of public sector workers will see their pay frozen next year
  • But those earning less than £24,000 a year will get a £250 increase
  • More than a million doctors, nurses and NHS workers will also see rise
  • National Living wage to rise by 2.2% to £8.91 an hour
  • Chancellor warns of ‘lasting’ damage to UK economy

State of the economy

image copyrightPA
  • Economy will have contracted 11.3% in 2020, the largest fall for more than 300 years
  • Economy forecast to grow by 5.5% next year and by 6.6% in 2022
  • Output not expected to return to pre-crisis levels until the fourth quarter of 2022
  • Unemployment is expected to reach 7.5% next spring, with 2.6m people out of work
  • Borrowing forecast to hit £394bn this year, equivalent to 19% of GDP, the highest ever in peacetime
  • UK debt will be equivalent to 91.9% of GDP this year and rise to 97.5% of GDP in 2025/26
  • In 2025, the economy will be around 3% smaller than was expected in March Budget forecast

Health and social care

image copyrightPA Media
  • £18bn for Covid testing, PPE and vaccines
  • An extra £3bn for the NHS in England
  • £1.5bn to ease existing pressures this winter
  • £1bn to tackle treatment backlogs and enable delayed operations to go ahead
  • £500m for mental health services in England
  • £300m extra grant funding for councils for social care
  • Equivalent sums for Scotland, Wales and Northern Ireland

Employment and business

image copyrightPA Media
  • A new £4.6bn package to help people back to work
  • £2.6bn for Restart scheme to support those out of work for 12 months
  • £1.6bn for the Kickstart scheme to subsidise jobs for young people
  • £375m skills package, including £138m to provide Lifetime Skills Guarantee
  • New £4bn “levelling up” fund to finance local infrastructure improvement projects
  • New UK infrastructure investment bank to be established

International aid and defence

image copyrightPA Media
  • Overseas aid budget to be cut from 0.7% to 0.5% of total national income
  • Will see reduction of about £5bn on support for tackling global poverty
  • UK will revert to 0.7% target in 2021-22 if the public finances allow
  • A multi-billion pound increase in annual defence spending over the next four years, creating 40,000 jobs
  • New centre dedicated to artificial intelligence
  • National cyber force to counter terrorists, organised crime groups and hostile states
  • Defence funding boost ‘extends British influence’

Schools, transport, crime and councils

image copyrightReuters
  • £2.2bn extra for schools in England
  • An extra £2bn for public transport, including subsidies for the rail network
  • £3bn in funding for local authorities, representing a 4.4% increase in spending power
  • £250m for councils to tackle rough sleeping
  • £4bn over four years to provide 18,000 new prison places

Scotland, Wales and Northern Ireland

  • £2.6bn for the devolved administrations

Recent Posts

Firms happy to reopen but have pandemic debt hangovers

"Whilst we are incredibly grateful for the support that we have seen from the government, there has still been the cost of keeping our team members on furlough, as well as paying our rent, service charges and utility bills, so it has had a significant impact on our...

read more

Bid to make financial terms and conditions clearer

Sheldon Mills, executive director of consumers and competition at the FCA, told the BBC this meant terms and conditions - as well as prices - would become clearer, it would be absolutely clear how customers could complain, additional charges would be clear and fair,...

read more