- 8th September 2021
- Posted by: Suzy Hill
- Category: Personal Tax, Business News
Autumn Budget set for 27 October
The Chancellor has confirmed that government spending plans will be outlined at the Spending Review on 27 October alongside a second Budget
This will be the second Budget of the year, following the March Budget which happened in mid-March, the week before the country went into lockdown due to covid-19.
The three-year review will set government departments’ resource and capital budgets for 2022-23 to 2024-25 and the devolved administrations’ block grants for the same period.
Mean core departmental spending will grow in real terms at nearly 4% per year on average over this parliament, the Treasury confirmed. By 2024-25 that means that core departmental spending will be £140bn more per year in cash terms than at the start of the parliament.
Part of the Spending Review will focus on plans to level up across the UK to increase and spread opportunity; ways to improve outcomes UK-wide where they lag and working closely with local leaders; and strengthen the private sector where it is weak. There will also be more detail about the government’s ambitions to lead the transition to net zero across the country.
Chancellor Rishi Sunak said: ‘At the Spending Review later this year, I will set out how we will continue to invest in public services and drive growth while keeping the public finances on a sustainable path.’
Core day-to-day departmental spending will follow the path set out at spring Budget 2021, with the addition of the net revenue raised by the new Health and Social Care Levy and the increase to dividend tax rates. The government will make available around an additional £12bn per year for health and social care on average over the next three years.
In total, day-to-day spending will increase to £440bn by 2024-25, increasing by nearly £100bn a year in cash terms over the parliament.
The spending increase is part of a broader plan to return public finances to a sustainable footing over the medium-term after the pandemic. The Treasury added that the ‘spending plans and focused tax changes to fund the Health and Social Care levy, alongside the measures taken at the last Budget, show that we are determined to get our fiscal position back on track, so that we can continue to fund excellent public services in the future’.
Departments have been asked to identify at least 5% savings and efficiencies from their day-to-day budgets as part of these plans.