Key Spending Review announcements
Supporting growth, reforming public services and building a fairer society
The Chancellor, George Osborne, has presented the Government’s Spending Review, which fixes spending budgets for each Government department up to 2014-15.
The diagram below shows you a summary of the departmental settlements in 2014-15, the last year of the period covered by the Spending Review
The Spending Review comes at a time when the State is spending significantly more money than it raises in taxation, and is having to meet the gap – called the deficit – by borrowing at record levels. Last year, the Government borrowed one pound in every four that it spent and the UK currently spends £43 billion on debt interest, which is more than it spends on schools in England.
This diagram showing government spending on debt interest and amount of borrowing as part of total budget:
This chart shows how much the State currently spends on debt interest in comparison to other areas of spending:
The Government has said that tackling Britain’s record deficit is its top priority and that it is necessary to secure sustainable economic growth. The consequences of not acting could be serious: higher interest rates, business failures and rising unemployment.
The Spending Review sets out spending plans for the four years until 2014-15. The scale of the deficit has required the Government to make tough choices about how taxpayers’ money is allocated. This chart shows government receipts and expenditure up to 2015-16
In its approach to these choices, the Government has prioritised:
- spending that promotes long-term growth, and creating the conditions for a private sector-led recovery and
- fairness, with all sections of society contributing to tacking the deficit, whilst protecting the most vulnerable and providing opportunity for the poorest.
This is underpinned by a radical programme of public service reform, improving transparency and accountability, giving more power and responsibility to citizens and enabling sustainable long term improvements in services.
The Spending Review also delivers the Government’s specific commitments set out in the Coalition Agreement to:
- increase NHS spending in real terms in each year of this Parliament;
- spend 0.7 per cent of Gross National Income on overseas aid by 2013 and
- restore the earnings link for the basic state pension from 2011, as part of the triple guarantee of using earnings, prices or 2.5 per cent, whichever is highest, from April 2011.
Find out how the Spending Review supports the Government’s priorities of:
In the run-up to the Spending Review, the Government engaged widely. It invited experts, public sector workers and members of the public to contribute their ideas to shape the way government works and to deliver better value for taxpayers’ money. Over 100,000 ideas were submitted, with the most promising being taken forward. Find out more about the Spending Challenge.