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Executive Leader Cllr Brenda Warrington

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Councillor Brenda Warrington, Executive Leader of Tameside Council

Spending Review 2020: A Missed Opportunity

Friday, 27 November 2020


On Wednesday afternoon the Chancellor of the Exchequer, Rishi Sunak, delivered the government’s Spending Review to the House of Commons. Unlike the Budget, where the biggest financial decisions in areas such as taxation are made, the purpose of a Spending Review is to focus specifically on the budgets and priorities of government departments. Typically these look at spending over a three to five year period, but due to the economic impact of the coronavirus pandemic most of the conclusions of the 2020 Spending Review will apply for the next financial year only.

The forecasts from the Office for Budget Responsibility (OBR), the government body that monitors the public finances, make for sobering reading. The OBR predicts that GDP will fall by 11.3% this year, the biggest decline in three hundred years, and that it is unlikely that the economy will return to its pre-coronavirus size until the end of 2022 at least. With recent news of progress on a vaccine there finally seems to be light at the end of the tunnel of this terrible pandemic. However, it is now clear that the coronavirus also has inflicted incredible long-term damage on our economy and society.

In this context I appreciate that some hard decisions have to be made. We are still assessing the full implications of the Spending Review for Tameside, but from our first look I believe that the government has taken the wrong course on many issues. I’m glad that NHS medical staff such as doctors and nurses will receive a pay increase this year, but this still means that many of the other key workers we have so depended on in the pandemic, including carers, teachers and police officers, will be “rewarded” for their tireless efforts with a pay freeze next year.

I’m also deeply worried that, with economic forecasts predicting that unemployment could rise by over a million people next year, the Chancellor said nothing to dispel the rumours that Universal Credit payments will be cut in April. This would amount of £1,040 a year being taken from people on low and middle-income at a time when they need it the most. It’s not just morally abhorrent, it’s bad economics too, and I urge the Chancellor to do the right thing and make it clear that this will not become a reality.

The announcement of a £4 billion “Levelling Up” fund to encourage more investment outside of London and the South East also leaves me with some concerns. While the possibility of more money to fix our unbalanced economy should be a cause for celebration, the fact remains that we’ve been here many times before. Once again, councils in the North such as Tameside are being asked to bring their begging bowl and ask the government directly for money, as opposed to being given the power and funding to make our own decisions based on what we know needs done in our local area. There are also serious questions about how the funding will be allocated. The National Audit Office have already expressed their concern about the handing out of billions of pounds of public money for coronavirus-related contracts to people and organisations with close links to key figures in the government. I sincerely hope that any Levelling Up funding will be given to those areas who actually need it most.  

I’ve made it clear that when this terrible pandemic is finally put behind us, the priority must be to build back better. Not just from coronavirus itself, but from a decade of austerity that left many people and local authorities on a cliff-edge even before the pandemic hit. That will not be achieved by betraying our public sector workers and low-paid employees, nor will left behind parts of the country be able to reach their potential if they're forced to fight each other for an inadequate pot of funding.  The coronavirus pandemic may be an unprecedented natural crisis, but a failure to rebuild will be a crisis delivered straight from the corridors of power.

 

Posted by: Executive Leader


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