A spending review, or occasionally a comprehensive spending review, is a governmental process in the
United Kingdom
The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the European mainland, continental mainland. It comprises England, Scotlan ...
carried out by
HM Treasury
His Majesty's Treasury (HM Treasury), occasionally referred to as the Exchequer, or more informally the Treasury, is a department of His Majesty's Government responsible for developing and executing the government's public finance policy and ...
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
Canada is a country in North America. Its ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, covering over , making it the world's second-largest country by tot ...
,
New Zealand
New Zealand ( mi, Aotearoa ) is an island country in the southwestern Pacific Ocean. It consists of two main landmasses—the North Island () and the South Island ()—and over 700 smaller islands. It is the sixth-largest island count ...
,
The Netherlands
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,
Italy
Italy ( it, Italia ), officially the Italian Republic, ) or the Republic of Italy, is a country in Southern Europe. It is located in the middle of the Mediterranean Sea, and its territory largely coincides with the homonymous geographical ...
,
Ireland
Ireland ( ; ga, Éire ; Ulster Scots dialect, Ulster-Scots: ) is an island in the Atlantic Ocean, North Atlantic Ocean, in Northwestern Europe, north-western Europe. It is separated from Great Britain to its east by the North Channel (Grea ...
, and
France
France (), officially the French Republic ( ), is a country primarily located in Western Europe. It also comprises of overseas regions and territories in the Americas and the Atlantic, Pacific and Indian Oceans. Its metropolitan area ...
. France conducted
its first comprehensive spending review (called in French "''la Révision Générale des Politiques Publiques''") in 2008.
The Netherlands
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have been carrying out spending reviews since 1981.
As a consequence of the
COVID-19 pandemic
The COVID-19 pandemic, also known as the coronavirus pandemic, is an ongoing global pandemic of coronavirus disease 2019 (COVID-19) caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). The novel virus was first identi ...
, 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
The voluntary sector, independent sector, or civic sector is the realm of social activity undertaken by organizations that are non-governmental nonprofit organizations. This sector is also called the third sector, community sector, and nonprofit ...
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
Within the budgetary process, deficit spending is the amount by which spending exceeds revenue over a particular period of time, also called simply deficit, or budget deficit; the opposite of budget surplus. The term may be applied to the budget ...
.
Chancellor of the Exchequer George Osborne
George Gideon Oliver Osborne (born Gideon Oliver Osborne; 23 May 1971) is a former British politician and newspaper editor who served as Chancellor of the Exchequer from 2010 to 2016 and as First Secretary of State from 2015 to 2016 in the ...
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
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.
predicted that the spending review led to a loss of about 490,000 public sector jobs by 2015.
saw a 0.4% increase in spending in real terms over the following 4 years.
A £200 million payment was announced to compensate savers in the collapsed savings society
.
A report published in late 2013 by Trust for London and the London School of Economics and Political Science estimated that local government budgets in London had taken a 33% real terms cut in central government funding for local government between 2009/10 and 2013/14.
delivered his first spending review on 25 November 2020. In contrast to previous years, and as a consequence of the
, the review covered a one-year period from 1 April 2021 to 31 March 2022.
. SR21 set departmental resource and capital budgets from 2022-23 to 2024-25 and covered the
' block grants for the same period of time. Chancellor
referred to the maintenance of committed budgets "for the remaining two years of this Spending Review".