Spending Review – what was (and wasn’t) announced?

The review outlines the allocation of funding from the Treasury to government departments until 2029. It also sets individual departments’ investment budget until the end of 2030. Cue months of intense negotiations in Whitehall between the Chancellor and her cabinet colleagues.

The perennial problem that the government faces is that they can’t spend money they don’t have. And with the economy still in a difficult place and Labour reluctant to break their manifesto pledges not to raise taxes or borrow more, then it means departmental cuts were always likely.

While overall departmental spending is projected to rise by 2.3%, some will receive a higher amount than others. This variance is largely due to the substantial increase in defence spending, which was announcing at the Spring Statement, and a significant financial boost for the NHS. The trade off was that eight departments suffered real-terms budget cuts.

Even though many of the announcements directly affect England, any funding decisions in devolved areas have a knock-on effect on the money the governments in Scotland, Wales and Northern Ireland receive from the UK Treasury through the Barnett Formula.

The government were keen to point out that Wednesday’s announcements signal a move away from austerity, made possible by the decisions the Treasury took in the recent budget. In contrast, opposition parties have slammed the spending plans for leaving a shortfall for public services and local government.

Ahead of the review, BASW made representations to the Treasury on behalf of the social work profession. Based on our Manifesto for Social Work, we called for:

• An increase in the non-taxable mileage allowance rate to 60p a mile
• Increased and more accessible social work student bursaries
• A Social Work workforce strategy prioritising recruitment and retention and professional career pathways specifically for all social workers.
• A long term funding settlement for local authorities to reform adult social care
• Match the £2.6bn funding needed for children’s social care, taking into account any funding lost due to cuts to children’s services.

We followed this up with a series of parliamentary questions to the Department for Health and Social Care around better resourcing the social work workforce. While these asks were not specifically included in the review, we will continue to push for the government to deliver them in this parliament.

We’ve summated what was and wasn’t announced in other key areas affecting social work.

Children’s Social Care

The government committed to maintaining £523m a year in allocated funding for children’s social care reform for the next three years. Additional funding of £555m as part of a wider transformation fund to invest in preventative provision and expanding support for care leavers was also announced. The government will argue that this meets the £2.6bn target outlined in the review of Children’s Social Care in addition to what has already been funded by the previous government. However, the review recommended that this target was met in four years, while the total funding that has been delivered is over a six year period.

Adult Social Care

Local councils have been given a real-terms increase in funding until 2028-29 which, along with an increase in the amount the NHS spends on adult social care through the Better Care Fund, amounts to over £4bn more a year spending on adult social care. However, the increase in funding is dependent on council tax rising over the same period and may also affect spending on other services, including children’s social care. Initial reaction across the sector also suggests that the funding announced isn’t enough to address the deep seated challenges facing adult social care services.

NHS & Mental Health

The headline announcement was undoubtedly the £29bn real terms increase in annual day-to-day NHS spending. While the Department for Health and Social Care received a £2.3bn increase in its annual capital budget. The government hopes that this cash injection will improve waiting times and modernise services. On mental health, the government says it will roll out Mental Health Support teams in all schools by the end of the parliament. However, absent was any commitment to raise funding for CAMHS. Furthermore, the pledge to employ 8,500 more mental health workers is significantly short of the 40,000 increase in the last parliament. 

Child Poverty 

An expansion of free school meals to all households receiving Universal Credit will be delivered in the government’s Children’s Wellbeing and Schools Bill currently making its way through parliament. However, there was no mention of whether the government will scrap the controversial two-child limit and benefit cap, despite mounting pressure from campaigners. The government’s much anticipated Child Poverty Strategy is due to be published in the autumn, which will set out more details around how they intend to tackle child poverty in this parliament.

Housing

The government is signalling its intent to tackle the housing crisis by committing to investing £39bn into an Affordable Homes Programme over the next ten years to meet its ambitious social and affordable house building targets. The Chancellor also unveiled £13.2bn funding for a Warm Homes Plan aimed at helping to reduce energy bills. She also revealed that the Housing Support Fund will be replaced with a new multi-year Crisis and Resilience Fund, a measure that has been warmly welcomed by anti-poverty campaign groups.

Immigration & Asylum

The Home Office is one of the departments feeling short-changed following the review as it’s set to experience a 1.7% cut in its budget. However, the government will provide the new Border Security Command with up to £280m a year to tackle smuggling gangs. The Chancellor also said that spending on hotels for asylum seekers waiting for their cases to be heard will be stopped.

What happens now?

The next major economic announcement will be the Chancellor’s UK Budget at the end of October. Given the high levels of spending that we now know will go into defence, housing and the NHS, there is speculation that the government will be backed into a corner around needing to raise taxes or increase borrowing. Whether they will or not is difficult to tell. For now, all bets are off.