UK chancellor announces largest departmental spend increase ‘this century’

By on 27/10/2021 | Updated on 27/10/2021
Chancellor Rishi Sunak leaving No.11 Downing Street on his way to deliver the Budget speech. Photo courtesy HM Treasury via Flickr

Spending by UK government departments is to grow by £150bn (US$206bn) over the period to 2024-25. UK chancellor Rishi Sunak announced the increase in his Budget and Spending Review today, along with plans to unfreeze public sector pay, reduce the civil service headcount, and move more officials to regional hubs as part of the government’s ‘levelling up’ agenda.

The rise in total departmental spending has been billed by the government as the “largest increase this century”, and represents a real terms uplift of 3.8% a year on average.  

“As a result of this Spending Review, and contrary to speculation, there will be a real terms rise in overall spending for every single department,” Sunak said.

The Treasury also revealed in Budget documents that following an efficiency and savings review launched in April to scrutinise spending, 5% of departmental budgets would be reinvested into “priority areas”.

It said these efficiencies would mean that the government could reduce ‘non-frontline’ civil service headcount to pre-pandemic levels by 2024-25, in turn helping to fund increases in frontline roles.

“This will mean a more productive and agile civil service, taking advantage of new ways of working to continue to reduce inefficiencies and deliver better outcomes for the public,” the Budget and Spending Review document said.   

Levelling up, spreading out

The Budget earmarks £348m [US$478m] to build new offices in regional hubs that would “enable the civil service to recruit from across the UK: from Cardiff to Darlington to Glasgow, increasing diversity of thought within decision making”.

It added that the Department for International Trade (DIT) will have relocated more than 500 civil servants from London to new trade and investment hubs in Scotland, Wales, Northern Ireland, and the north of England by the end of the period.

“[The moves] ensure the benefits of the UK’s global trade policy are channelled to all parts of the UK and build stronger links between the regions and DIT’s support for exports and investment,” the Budget statement said.

Public sector pay thaw

Sunak also committed to end the public sector pay freeze that came into force in April but did not set out details of how much pay could rise. He said the government would seek recommendations on public sector pay from independent bodies.

General secretary of Prospect union, Mike Clancy, said: “Hundreds of thousands of civil servants, and millions of public sector workers, aren’t covered by these bodies and need government to guarantee a fair pay rise for them.

“What mustn’t happen is yet another free-for-all on expensive consultants, wasting public money and failing to reward public servants who have been heroes of the pandemic.”

Also responding to the announcement on pay, FDA assistant general secretary Lucille Thirlby said: “While it’s welcome to hear the chancellor commit to ‘fair and affordable’ pay rises for public sector workers across the whole Spending Review period, the pay freeze won’t really be over unless the chancellor fully funds pay rises above the rising cost of living.”

About Jack Aldane

Jack is a British journalist, cartoonist and podcaster. He graduated from Heythrop College London in 2009 with a BA in philosophy, before living and working in China for three years as a freelance reporter. After training in financial journalism at City University from 2013 to 2014, Jack worked at Bloomberg and Thomson Reuters before moving into editing magazines on global trade and development finance. Shortly after editing opinion writing for UnHerd, he joined the independent think tank ResPublica, where he led a media campaign to change the health and safety requirements around asbestos in UK public buildings. As host and producer of The Booking Club podcast – a conversation series featuring prominent authors and commentators at their favourite restaurants – Jack continues to engage today’s most distinguished thinkers on the biggest problems pertaining to ideology and power in the 21st century. He joined Global Government Forum as its Senior Staff Writer and Community Co-ordinator in 2021.

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