Spending Review 2020: What It Means for You
Understanding the Spending Review 2020
Wow, what a year this has turned out to be. At the turn of 2020, no one quite knew what was about to unfold but the COVID-19 pandemic and resulting lockdowns have certainly thrown a spanner in the works for many businesses. If you’ve been busy navigating this difficult climate and staying above water, you might have missed the Spending Review 2020 announced by Rishi Sunak. We know many parts of this will be of interest to our clients, so we’ve taken the time to round up the latest budgetary plans.
The Spending Review 2020 – A Roundup of Main Themes
A lot was covered in the Spending Review 2020, but there were three main themes that require some attention. Main topics of conversation included:
- Increased funding to tackle COVID-19
- More money for public services
- A focus on capital spending to increase the UK’s COVID-19 recovery.
Let’s break each of these sections down to gain a deeper insight.
Of course, fighting the COVID-19 pandemic which has caused great suffering in the UK was a huge priority and something of great focus. According to the Spending Review 2020, an extra £38 billion will be invested in COVID-related initiatives to get the virus under control. A further £44 billion is expected to be added in 2021.
The money will be spent on everything from increased COVID-19 testing and vaccine purchases as well as ordering a larger supply of COVID-19 medication. Some of the allocated COVID-19 support fund will also go to the NHS to help address the issue of delayed treatments.
Public Service Investment
The NHS and police force came into the spotlight too with regards to public service investment. It was pledged there will be a £6.3 billion increase in NHS spending in 2021-22 which is perhaps not surprising considering the state of the pandemic, a £2.2 billion uplift to the core schools’ budget, £400 million to recruit 20,000 more police officers, £63 million to tackle economic crime and £337 million for the criminal justice system.
Capital Spending and Jobs
With regard to jobs there was a mixed bag of information. Some good news and some bad. Firstly it was revealed that public sector pay will largely be frozen next year, except for 1 million NHS doctors and nurses. 2.1 million public sector workers who earn below the median wage of £24,000 will get a pay rise of at least £250. A 3-year Restart scheme specifically designed to get people back into work was also allocated £2.9 billion from the capital spending pot. Importantly, from April 2021, the National Living Wage will increase 2.2% to £8.91 per hour.
The Spending Review 2020 was undoubtedly a reflection on the year we’re currently limping through. The economy is projected to contract by 11.3% in this year alone but with predictions it’ll bounce back to its pre-pandemic size by the end of 2022, there’s still hope. If you need help with any aspects of your financial life, speak to a qualified accountant today. We’re always available to help and can point you in the right direction.