What does the Spending Review mean for you and your business?
Set among the turmoil of Brexit and the moves in Parliament to block a ‘no-deal’ exit, Sajid Javid’s first spending review was always going to be overshadowed by fast-moving events.
Indeed, at the time of writing, there’s no certainty that the government will remain in place to put the Chancellor’s plans through. If – as it looks likely – there’s an election, we could have a very different administration by mid-October.
But assuming the spending review plans come to pass, what do they mean for you and your business? Here’s a quick summary, compiled as the Chancellor delivered his speech.
Javid began by saying that he wanted to build a safer, healthier and better educated country and to turn a new page on austerity. Turning to the detail, he largely focused on budget increases to government department budgets. Announcements included:
- £2 billion of funding for Brexit delivery for 2020-21, on top of the £2.1 billion announced for Brexit and no-deal preparedness already announced.
- Day-to-day spending will increase by £13.8 billion (4.1%) in real terms, the biggest jump for 15 years.
- An extra 6.3% in Home Office spending, including £750 million to recruit 20,000 new police officers.
- An extra 5% real terms increase in Ministry of Justice spending, including £100 million to increase security in prisons.
- A £6.2 billion increase in NHS funding, including upgrades to 20 hospitals and training for doctors and nurses.
- £54 million extra to tackle homelessness and rough sleeping.
- £30 million to help meet the Net Zero emissions target by 2050 plus 3.3% extra for DEFRA.
- An extra £7.1 billion for schools – with £700m for special educational needs.
- An additional £400 million for 16-19 education.
- £200 million for bus services, including ultra-low-emissions buses.
- An extra £1.2 billion for the Scottish Government, £600 million for the Welsh Government and £400 million for the Northern Ireland Administration.
- £90 million for new diplomats and overseas staff, with new and upgraded diplomatic posts.
- £46 million for the 2022 Commonwealth Games in Birmingham.
- A further £2.2 billion (2.6%) for the Defence budget
- No government department will have its budget cut next year.
So, what does all this mean for you and your business?
It’s hard to say at this stage, not only because the government may change, but because the announcements lacked detail about exactly how departments will spend their extra budgets.
On the plus side, the cuts of the last fifteen years seem to have finally eased (for now). On the other side of the ledger, it’s hard to plan ahead when the outcome of Brexit is still uncertain.
Something tells us we may be summarising the Budget of a new government for you within only a few weeks!
Business advice with THP
Struggling to understand what the spending review means for you and your business, here at THP Chartered Accountants we can help, offering a range of accountancy services and business advice to help your small business move forward from bookkeeping, VAT returns, cloud accounting (Xero and FreeAgent) and much more, contact us today. With offices in Chelmsford, Cheam, Wanstead, Saffron Walden and London City