In a ‘normal year’ a Comprehensive Spending Review (CSR) would be one of the most talked about political milestones in the calendar, with no shortage of column inches, ministerial interviews, and debate dedicated to its progress. Alas, we have not had a normal year for quite some time, and 2020 is firmly at the top of the charts for abnormality. So you would be forgiven for thinking that the CSR – which will shape Government spending for the remainder of this Parliament – is a bit of an afterthought.
But behind the scenes, the machinery of Government is in motion and has been for some time. Number crunching and ruthless prioritisation under way as the CSR is compiled. The Government is in a tremendous pickle in terms of how to approach this. The 2019 General Election was won on the promise of public spending, levelling up, and an end to austerity. However, since then, the Government has had to undergo an unprecedented spending spree to mitigate the impact of COVID-19, with the nation’s debt now topping £2 trillion as a result. We also have the small matter of Brexit upon us once again, with the potential financial consequences of ‘no-deal’ unknown, and the transition period ebbing away.
The instincts of any previous Conservative Government would be to use the CSR as a way of showing how this state of affairs will be paid back and future proofed, with sharp cuts to public spending. You can almost hear George Osborne’s dulcet tones had this been him – ‘tough decisions in the national interest to prevent saddling future generations with debt.’ But the whole point of Johnson’s Government, the way they won, their raison d’etre, is to move away from that. The Tories now represent areas like Bolton, Bassetlaw, and Bolsover – stringent public spending cuts will not fly in these communities.
The likely result of this dilemma will be a careful mix and match of investment and cuts. Savings will have to be made – it would be irresponsible not to make any – but they will be offset by new spending commitments in the areas this Government prioritises. Expect money to be made available for infrastructure spending outside of London for instance (which could be expressed through extra funding for BEIS, MHCLG, and DfT). We should also expect the Government to protect the health budget for obvious reasons, with the NHS even more loved than before. In short, any CSR submission, this year more than ever, will have to tie very closely in to the Government’s central ambitions. If it isn’t going to help ‘level up’ the country, if it isn’t going to create jobs, if it isn’t going to support our front line workers, then it will be a big ask getting this Government to bite. All organisations engaging in the process will need to be alive to this, and ensure any spending requests deliver on at least one of these three objectives.
In terms of who the key players are in the CSR, there is usually a prominent role for the Minister for the Cabinet Office – in this case, one Mr Michael Gove. There will also be an important role for the Chancellor ‘dishy Rishi’ Sunak, Mr half price food and the Government’s only popular member, who will be a major decision maker and will also likely do a lot of the PR, selling the review to the public. But with this Government perhaps even more than previous ones, Number 10 is paramount. Sunak was only made Chancellor in the context of a Number 10 power grab after all. Johnson and his team of advisors are keen to hold the cards, and will have huge influence.
So there is lots to digest about the CSR, against the backdrop of a unique political context. If you are interested in the Spending Review, please do sign up for our panel discussion on Tuesday 8 September, where there will be more intel, analysis and debate around who the winners will be in this process, and how to effectively lobby in this unique environment.
