What we know so far about Chancellor Rishi Sunak's Budget and Spending Review
Chancellor Rishi Sunak has left little room for surprises ahead of his Budget and Spending Review on Wednesday, after a number of announcements totalling billions were made.
Mr Sunak will head to the Commons with a focus on levelling up transport links outside London, clearing the NHS backlog, and a “skills revolution”.
And although some 11 areas of investment were announced, including in skills and education, families, business, transport and culture, Mr Sunak is also expected to impress on MPs the importance of keeping public finances in a healthy state.
He said on Sunday: “(over) the last year, I’ve been focused on delivering our plan for jobs, protecting people’s livelihoods, their incomes, their jobs”.
But he said he would now be “looking to the future and building a stronger economy for the British people”.
How is the pandemic likely to affect the measures introduced in the budget?
Mr Sunak will be expected to demonstrate how the prime minister’s promise of a new high-skill, high wage economy can be achieved, and face questions over the cost of living crisis Labour is keen to expose.
Here’s what we know so far about where the money will be spent.
Minimum wage
Around two million workers will get a pay rise next year when the National Living Wage is increased from £8.91 an hour to £9.50.
The Treasury confirmed on Monday that the increase for all over-23s will take place on April 1.
The 59p hourly boost will mean a full-time worker on the living wage will get a pay rise of more than £1,000 per year, according to the government.
NHS
A £5.9 billion package of funding to help tackle NHS backlogs across England will form part of the upcoming Budget. This will include:
- £2.1 billion to be invested in technology and data in a bid to improve efficiency and security within the NHS.
- £2.3 billion will be used to try to transform diagnostic services in an effort to address the Covid backlog of people waiting for checks, tests and scans, and help get waiting lists down.
- £1.5 billion for increased bed capacity, equipment and new surgical hubs to tackle waiting times for elective surgeries.
The Treasury said the funding package is on top of the government’s plan to spend £8 billion to tackle the elective backlog over the next three years, and the £97 billion additional funding the government has provided to support health and social care since the start of the pandemic.
Mr Sunak said: “We are committed to getting health services back on track and ensuring no one is left waiting for vital tests or treatment. “This is a game-changing investment in the NHS to make sure we have the right buildings, equipment and systems to get patients the help they need and make sure the NHS is fit for the future”.
Public sector
More than five million public sector workers such as teachers, nurses and armed forces personnel could be in line for a pay rise next year.
The year-long public sector pay freeze is to end, after it was brought in because of heavy borrowing due to the pandemic.
The public sector pay increases were paused in 2021/2022, with the exception of the NHS and workers earning less than £24,000.
Skills and education
Roughly £3 billion of investment into both post-16 education but also for adults later in life.
The projects will include:
- An investment of £550 million into the National Skills Fund to quadruple the number of places on the skills boot camps - available for adults of any age - in areas such as artificial intelligence, cybersecurity.
- £1.6 billion will provide additional classroom hours for up to 100,000 16- to 19-year-olds studying for T-levels, or technical-based qualifications.
- £830 million in extra funding allocated to existing colleges in England for new equipment and facilities.
- Apprenticeship funding will increase by £170 million to £2.7 billion in 2024/25.
- Some 24,000 traineeships will be created.
- Free Level 3 courses for adults, which are equivalent to A-levels, in subjects like maths, chemistry and biology, will be expanded.
Mr Sunak said: “Our future economic success depends not just on the education we give to our children but the lifelong learning we offer to adults.
“This £3 billion skills revolution builds on our plan for jobs and will spread opportunity across the UK by transforming post-16 education, giving people the skills they need to earn more and get on in life”.
Families
Hundreds of thousands of families are set to receive extra support as part of a £500 million investment package.
The funding includes:
- £80 million worth of spending into creating another 75 Family Hubs in local authorities across England, which are support centres for families to access services in one place.
- £100 million will go towards supporting the mental health of expectant parents.
- £120 million will be invested in other comprehensive family support programmes.
- An extra £200m boost to support people through complex issues that could lead to family breakdown, helping around 300,000 of the most vulnerable in society.
Mr Sunak said: “I passionately believe that we have a duty to give young families and their children the best possible start in life.
“We know that the first thousand and one days of a child’s life are some of the most important in their development – which is why I’m thrilled that this investment will guarantee that thousands of families across England are given support to lead healthy and happy lives.”
Businesses
Innovative UK businesses are set to benefit from a £1.4 billion investment fund.
The Global Britain Investment Fund will hand out grants to encourage internationally mobile companies to invest in the UK’s critical industries, including life sciences and automotive.
The Treasury said companies with “strategically important investment proposals” would be able to get grants towards their schemes through the fund.
The fund will include:
- £354 million to support investment in life sciences manufacturing, increasing resilience for future pandemics.
- £800 million investment in the production and supply chain of electric vehicles including in the North East and Midlands.
Rishi Sunak will also announce the extension of the recovery loan scheme for a further six months until June 30 2022.
As well as £312 million for the British Business Bank’s start-up loans programme to provide 33,000 loans to entrepreneurs across the UK looking to start or grow their business.
A new talent network will also be set up in innovation hotspots, first in the Bay Area of San Francisco and Boston in the US in 2022, and also Bengaluru in India.
The Chancellor is also expected to confirm the government’s intention to make it easier for companies to relocate to the UK through a new redomiciliation regime similar to those available in Canada, New Zealand, Switzerland and a number of US states, strengthening the UK’s position as a global business hub and an open, competitive, free-market economy.
The Chancellor said: “We want to make the UK the best place in the world to start, grow and invest in a business, as we continue to support enterprise, create jobs, and level up as we recover from the pandemic and look to the future.
“As we forge the UK’s future as a global scientific and technology superpower, we will ensure the UK continues to be the destination of choice for international talent”.
Transport
Nearly £7 billion is set to be pumped into transport to give metro mayors the power, and responsibility, to improve key links.
The money will be given to areas such as Greater Manchester, the West Midlands and South Yorkshire for projects ranging from tram improvements to introducing London-style improvements in infrastructure, fares and services.
- There will be £830 million given to West Yorkshire, £570 million in South Yorkshire, £1.05 billion in the West Midlands, £310 million in Tees Valley, £540 million in the West of England and £710 million for the Liverpool City Region.
- Roughly £5.7 billion will be transport settlements for the regions over five years - it was increased from the initial £4.2 billion proposed, the Treasury said.
- £1.2 billion of new funding will go towards transforming bus services to deliver London-style journey times, fares and number of services, as part of £3 billion that the Prime Minister committed to spending on a “bus revolution” in March.
Rishi Sunak said: “Great cities need great transport and that is why we’re investing billions to improve connections in our city regions as we level up opportunities across the country.
“This transport revolution will help redress that imbalance as we modernise our local transport networks so they are fit for our great cities and those people who live and work in them”.
Culture
Museums and galleries in England will receive a boost of £850 million to “breathe life” back into cultural hotspots.
The money will be used to restore and upgrade some of the country’s most popular institutions such as London’s V&A museum, Tate Liverpool and the Imperial War Museum in Duxford.
Projects that will be funded include:
- £125 million will go towards helping build a new state of the art scientific research centre in Oxfordshire, part of the Natural History Museum, which is set to open in 2026, and will house 27 million specimens.
- £75 million will be spent to help 110 regional museums and libraries improve their buildings and level-up their digital facilities.
- Funding will also be given to the flagship High Streets Heritage Action Zone programme to help continue its mission to revive town centres across England.
Mr Sunak said: “From science museums to art galleries to our most cherished historical sites, I am proud to be part of a country with such a strong cultural heritage.
“That is why we’re investing hundreds of millions – so it’s not just today people can enjoy their favourite spots, but for generations to come”.
Health research
The Department of Health and Social Care will be handed £5 billion over three years to invest in, among other areas, genomics sequencing and health inequalities.
The Chancellor said the pandemic had shown “how important innovative research and development is in delivering new, life-saving treatments”.
The Office for Life Sciences will receive £95 million to deliver on promises over cancer, obesity and mental health.
Other big-ticket items for investment include:
– £2.6 billion to create new school places for children with disabilities and special educational needs;
– £1.8 billion investment to help councils build homes on brownfield sites;
– £700 million for a new fleet of patrol boats for Britain’s borders;
– £700 million to improve football pitches, tennis courts and youth facilities;
– £560 million to provide personalised maths coaching for up to 500,000 adults;
– £435 million for crime prevention and the Crown Prosecution Service, part of which aims to improve the response to rape and sexual assault cases;
– £150 million to make Dragons’ Den style angel investors available for those outside London and the south east, and;
– £5 million for cutting-edge treatments for veterans.