During his statement to the House of Commons the Chancellor announced measures to deal with the.....

The Chancellor of the Exchequer, Rishi Sunak MP, has delivered his 2020 Spending Review

During his oral statement to the House of Commons the Chancellor announced measures to deal with the effects of Coronavirus. He stated that it was the Government’s ‘immediate priority to protect peoples’ lives and livelihoods’. The Chancellor stated that the economic emergency ‘was not yet over’. The Chancellor also announced that Government was publishing a National Infrastructure Strategy and establishing a new UK Infrastructure Bank.

The Spending Review 2020 can be accessed here. A press release from HM Treasury can be accessed here. HM Treasury has also published a new version of the Green Book, which contains guidance on how to appraise and evaluate policies, projects and programmes. It can be accessed here.

Key Fiscal Projections

BFM has pulled out the key announcements from the Spending Review.

  • The Government also remains committed to continuing to support the low-paid. Therefore, following the recommendations of the independent Low Pay Commission (LPC), the government will increase the National Living Wage (NLW) for individuals aged 23 and over by 2.2 per cent from £8.72 to £8.91, effective from April 2021. This follows the government’s acceptance of a previous recommendation from the LPC that the NLW apply to those 23 and over from April 2021.
  • The Government has also accepted the LPC’s recommendations for the other National Minimum Wage (NMW) rates to apply from April 2021 including:
    • increasing the rate for 21 to 22-year-olds by 2.0 per cent from £8.20 to £8.36 per hour
    • increasing the rate for 18 to 20-year-olds by 1.7 per cent from £6.45 to £6.56 per hour
    • increasing the rate for 16 to 17-year-olds by 1.5 per cent from £4.55 to £4.62 per hour
    • increasing the rate for apprentices by 3.6 per cent from £4.15 to £4.30 per hour
    • increasing the daily accommodation offset rate by 2.0 per cent from £8.20 to £8.3
  • The Spending Review builds on the support offered to businesses to help them grow through these uncertain times and meet the challenges of the virus. SR20:
  • confirms £519 million of funding in 2021-22 to support the continued delivery of Covid-19 loans, including paying for the 12-month interest free period on the BBLS and the CBILS
  • freezes the business rates multiplier in 2021-22, saving businesses in England £575 million over the next five years. The government is also considering options for further Covid-19 related support through business rates reliefs. In order to ensure that any decisions best meet the evolving challenges presented by Covid-19, the government will outline plans for 2021-22 reliefs in the New Year
  • provides an additional £56.5 million in 2021-22 to support the vitality and entrepreneurship of the UK by expanding the British Business Bank’s Start-Up Loans to meet the increase in demand and support entrepreneurs to start and grow their business
  • SR20 confirms 2021-22 funding for the Plan for Jobs, as part of a £1.8 billion uplift which will mean average annual growth in DWP’s budget of 28.1 per cent from 2019-20 to 2021-22. This includes:
    • funding the £2 billion Kickstart scheme which will create hundreds of thousands of new, fully subsidised jobs for young people at risk of long-term unemployment across Great Britain. The SR20 settlement includes £1.6 billion in 2021-22 which will ensure funding for over 250,000 Kickstart jobs
    • investing £0.2 billion in other job search support measures announced in the Plan for Jobs this Summer, including the Job Entry: Targeted Support and Job Finding Support schemes, the Youth Offer and Sector-based Work Academy Programme placements.
  • The Spending Review also provides additional education funding in 2021-22 to:
    • invest in Further Education to ensure that core funding for 16 to 19-year-olds is maintained in real terms per learner, rising in line with demographic growth
    • continue delivering opportunities for lifelong learning, helping those who want or need to reskill to do so at any stage of their life or career
    • confirm changes to support employers offering apprenticeships by delivering further improvements to the system
    • providing £1.5 billion over six years to deliver the government’s commitment to bring all Further Education college estates in England up to a “good” condition.