Spending Review

A spending review, or occasionally a comprehensive spending review, is a governmental process in the United Kingdom carried out by HM Treasury to set firm expenditure limits and, through public service agreements, define the key improvements that the public can expect from these resources.

Spending reviews typically focus upon one or several aspects of public spending while comprehensive spending reviews focus upon each government department's spending requirements from a zero base (i.e. without reference to past plans or, initially, current expenditure). The latter are named after the year in which they are announced – thus ''CSR07'' (completed in October 2007) applies to financial years 2008–2011.

Other developed countries have similar review processes, e.g. Canada, New Zealand, The Netherlands, Italy, Ireland, and France. France conducted its first comprehensive spending review (called in French "''la Révision Générale des Politiques Publiques''") in 2008. The Netherlands have been carrying out spending reviews since 1981.

As a consequence of the COVID-19 pandemic, the 2020 review covered just a one-year period in contrast to previous years. The 2021 spending review was subsumed into the October 2021 budget.

2002 Spending Review

The 2002 Spending Review (SR02) set a target for expanding the role of voluntary sector organisations in the provision of public services, anticipating growth by 5% in the period to 2005-06.

2007 Comprehensive Spending Review

The UK's 2007 Comprehensive Spending Review included three significant changes. The first was that it represented the first test of the capacity of the Spending Review process to plan and deliver a discretionary fiscal consolidation in the UK. The previous four Spending Reviews took place during a period of steady public growth in the economy from 37% in 1999–00 to 42% by 2007–08. As both the UK's then fiscal rules (the " Golden Rule" and the sustainable investment rule) began to bite, the UK government desired to halve the real rate of growth in public spending from 4% per annum over the last decade to 2% per annum over the next three years – a 0.5% below than the trend rate of growth of the economy. A second noteworthy development in the 2007 CSR was a marked extension in the certainty that the UK system provided to public sector managers about their future budgets. Finally, CSR07 saw the UK's public service 110 largely departmental-based Public Service Agreements consolidated into 30 inter-departmental agreements.

2010 Spending Review

A spending review for the years 2011/12 through to 2014/15 was announced by the coalition government. This review was driven by a desire to reduce government spending in order to cut the budget deficit.

Chancellor of the Exchequer George Osborne announced the details of the spending review on 20 October 2010. The cuts were described as the biggest since World War II. The review led to an £81 billion cut in public spending in the following 4 years of the parliament, with average departmental cuts of 19%. In addition major changes in welfare were announced including £7 billion of extra welfare cuts, changes to incapacity benefit, housing benefit and tax credits and a rise in the state pension age to 66 from 2020. Public sector employees will face a £3.5 billion increase in public pension contributions.

The Home Office faced cuts of 25%, local councils would face a yearly 7% cut in funding from central government each year until 2014. The Ministry of Defence faced cuts of around 8%. In addition many other public sector bodies had cuts to their funding. Although not part of government the BBC
...