Chancellor announces one-year budget round as Spending Review shelved due to Brexit

By Derren Hayes

| 09 August 2019

The government is to undertake a one-year spending round for public services in 2020-21, Chancellor of the Exchequer Sajid Javid has announced.

The Chancellor said the one-year spending deal will give certainty to public services

The announcement means the three-year Comprehensive Spending Review - which was due to be delivered in the autumn - will now be shelved until late 2020 due to issues surrounding the UK's exit of the European Union, which is set to happen on 31 October.

Javid said the one-year spending round will ensure departments and devolved administrations have the financial certainty they need to deliver their plans on public services next year.

He said: "The Prime Minister and I have asked for a fast-tracked spending round for September to set departmental budgets for next year. This will clear the ground ahead of Brexit while delivering on people's priorities."

The Spending Review, which sets Whitehall budgets for three years, was due to cover the period 2020-23, but will now not begin until April 2021.

The decision has raised concerns that much-needed investment across services for children and young people could now be delayed, inluding for children's services, early years and youth work.

Neil Leitch, chief executive of the Early Years Alliance said: "While the NHS, police and schools are clearly in need of extra cash, we hope that the Chancellor will find money in the 2020-21 spending round to make up the £662 million shortfall in early years funding.

"The sector cannot carry on for yet another year delivering the government's flagship childcare schemes based on 2015 cost analysis.

"We will undoubtedly see further closures, and those childcare providers who do manage to stay open will be forced to charge parents more for private hours and for extras, or place restrictions on when parents can access funded places.

"The early years is a sector in financial crisis: the government knows it and can no longer afford to ignore it."

James Jamieson, chairman of the Local Government Association said:

"Vital local services provided by councils face a funding gap of more than £5 billion next year, rising to £8 billion by 2025.

"Councils urgently need some certainty about how local services will be funded next year as they begin their budget-setting process, so we are pleased that the announced Spending Round will be completed in September.

"The Spending Round needs to make securing the sustainability of local services the top priority. It needs to confirm the continuation of key funding streams such as the Better Care Fund, and guarantee councils will have enough money to meet the growing demand pressures they face next year.

"Only with the right funding and powers can councils meet their legal duties to provide dignified care for people who are elderly or disabled, protect children, prevent and reduce homelessness and protect the wide-range of other valued local services which also make such a positive difference to communities and people's lives."

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