UK Spending Review sets out how government will make reform of the state happen
The UK government has set out how it will fund its transformation ambitions for the country, with plans to upgrade the state so it meets “the priorities of working people”.
The Spending Review sets out departmental budgets across the UK government for day‑to‑day spending until 2028‑29, and until 2029‑30 for capital investment. According to the Treasury, total departmental budgets will grow by 2.3% across the period, with increases frontloaded for the early years.
Reeves said the review would unleash “national renewal”, with funding focused on achieving the government’s Plan for Change and missions. These are: kick‑starting economic growth, cutting hospital waiting lists, giving children the best start in life, securing control of the country’s borders, putting police back on the beat, building 1.5 million new homes, and securing home‑grown energy.
“We are renewing Britain,” Reeves said. “But I know that too many people in too many parts of our country are yet to feel it. This government’s task [and] the purpose of this Spending Review is to change that [and] ensure that renewal is felt in people’s everyday lives, in their jobs, and on their high streets. The priorities of this Spending Review are the priorities of working people.”
Three priorities for rewiring the state
Much of the review is focused on improving the efficiency and effectiveness of the government.
The government has set out three priorities for “rewiring the state”. These are:
- Using new technology to digitise services and transform how government operates.
- Creating a cost-conscious culture that relentlessly roots out waste, drives efficiency, and protects taxpayers’ money.
- Establishing a leaner, higher-skilled civil service that is closer to the communities it serves.
The Spending Review confirms the allocation of the previously-announced £3.25bn (US$4.4bn) Transformation Fund, which will focus on digital transformation; prevention; and productivity and efficiency.
Additionally, the Spending Review will also allocate £2bn (US$2.7bn) for artificial intelligence with the aim of harnessing the transformative potential of AI both in government and across society, in line with the government’s AI Opportunities Action Plan. This will include investment in the use of AI in the NHS, and scaling the most promising opportunities for AI adoption in the public sector.
The review also pledges to build strong digital and technology foundations, tackle urgent cybersecurity and technical resilience risks, modernise public service delivery and drive a major overhaul in government productivity and efficiency.
There will also be a £1.2bn (US$1.6bn) increase in departmental expenditure at the Department for Science, Innovation and Technology to drive forward cross-cutting digital priorities across government. The total fund allocated to digital government in the Spending Review will “up to” £1.9bn (US$2.6bn).
The Treasury said that these cross-cutting priorities would include renewed digital public infrastructure, including the launch of the GOV.UK Wallet, and a GOV.UK App being driven by the Government Digital Service in DSIT, with the aim of providing “more personalised user experiences and verifiable digital credentials for citizens”.
Read more: UK government sets out new ‘start-up’ approach to funding digital and AI projects
Boosting civil service transformation capabilities
The review also highlights a number of plans to boost civil service capabilities and capacity. A new National Data Library will be launched to join up data across the public sector, while the government will invest £800m (US$1bn) in shared services across HR, commercial and finance processes, and data. The Spending Review will also provide an initial £20m (US$27m) to update its finance operating model by transforming the digital and data architecture of public spending.
First announced by chief secretary to the Treasury Darren Jones, this is intended to allow for a smarter, data-driven approach to evaluating expenditure. This will be linked to a new planning and performance framework, to be published in the Budget later this year, to better track the performance of government spending, with the aim of unlocking evidence-based decision-making and greater accountability.
Details of government efficiency drive
This is part of a wider pledge to create what the Spending Review calls “a cost-conscious culture in government”. The Treasury says that this is the first zero-based spending review in 18 years, and all government departments have identified at least 5% savings and efficiencies by 2028-29.
Altogether, the departments have pledged to reduce their administration budgets by at least 16% in real terms by 2029‑30. This will support a rebalancing of day‑to‑day spending away from central government and towards the services that the public rely on.
Departments have been assisted in setting these efficiency programmes by the Office for Value for Money, the time-limited unit based in HM Treasury to support decision-making in the Spending Review. According to the Treasury, the office has conducted an assessment of where and how to improve efficiency. These targets have been published alongside the Spending Review. The Office for Value for Money has also undertaken value for money studies into what the Treasury described as “two high-risk areas of cross-departmental spending”: governance and budgeting arrangements for mega projects; and procurement of short-term residential accommodation. Summaries of these will be published shortly, according to the government.
The office will also lead a programme of thematic value for money reviews in the years between Spending Reviews. The subject of the thematic reviews will be announced in the autumn, alongside the publication of terms of reference.
As part of a culture of continuous improvement, the government also set out steps to create “a cost-effective, high performing civil service”.
In particular, the government has said it will publish the first ever civil service strategic workforce plan later this year, and the review also recommits the government to having one in ten civil servants working in digital roles by 2030.
The government has allocated £50m (US$68m) from the Transformation Fund to increase workforce productivity, including improving civil service learning and development, and reducing dependency on costly external training provision. This will ensure civil servants are more skilled and better able to deliver on public priorities, according to the government.
About Richard Johnstone
Related Posts
