Spending review: Three things to look out for – and four things we hope for

Bridget Phillipson
© Twitter/@Keir_Starmer

Chancellor Rishi Sunak will present his first spending review tomorrow. We can expect a blizzard of announcements from a government desperate to give the impression that it is finally getting a grip on Britain’s jobs crisis. But the real test will be simple: does it materially improve the lives of families across the country?

A spending review is a chance to shape the sort of country we want to be. Labour is ambitious for Britain: we want to make it the best place to grow up in and the best place to grow old in. Sadly, we’re going backwards under the Tories. After a decade of Conservative rule, inequality has risen, wages are stagnant, childcare and elderly care costs are through the roof, crime has been rising and high streets across the country are struggling.

This government claims it has the answers to regional inequality. But the Conservatives have simply not delivered. On Wednesday, they’ll make a lot of noise about ‘levelling up’ the country with another set of pledges on infrastructure. But when it comes to infrastructure, from Boris Island to the Boris Bridge, the Prime Minister’s record on delivering on his promises is one of utter failure.

And those failures don’t start and end with the Prime Minister. Ten years of Conservative failures have seen billions wasted on pet projects and white elephants instead of action to make a difference to people’s lives. The Tories talk about levelling up, but the reality is that they’ve been letting people down.

That’s why people don’t want to hear more empty rhetoric and last-minute decision-making from this government. It’s time for responsible choices to protect our key workers, secure the economy and recover jobs in every part of the country. And it’s time for a relentless focus on jobs and growth to get our economy back on its feet, with urgent action to recover jobs, retrain workers and rebuild business in every part of the country.

The spending review doesn’t usually involve any new taxes (which get announced in the Budget), but we do expect to see the long-delayed National Infrastructure Strategy, updated economic forecasts from the Office for Budget Responsibility (OBR) and new “Green Book” guidance for civil servants on how to appraise and evaluate proposals for public spending.

All told, there is plenty of scope for the government to use the spending review to set a better course for our country – but plenty of reason to suspect that’s not what it will do. So what else should we be looking for this week?

First up, there are three things we think the Tories will try to get away with in the spending review…

1. Have I heard this one before?

Capital spending (investment and things that will create growth in the future, like new transport links) is something the Conservative government is very good at announcing, and rather less good at delivering. Some projects have been announced, and announced again, and announced once more, but still they’re not there. We imagine we might see some of them announced yet again this week.

Look out for such long running favourites as the perennially missed 300,000 homes a year target, completing the snail-paced rollout of superfast broadband, finishing the long overdue courts modernisation programme, the vastly over budget Royal Liverpool Hospital, or the migration of several of the UK’s existing benefits into the framework of Universal Credit.

2. Freezing key worker pay

The pandemic has taught us all who the real key workers are in our society. The social carers who look after the elderly and vulnerable, the NHS staff, the delivery drivers and the retail workers who’ve kept goods moving and kept our economy going through first one national lockdown then another. We can’t clap for our carers one month, then deny them a pay rise the next. Yet unbelievably, it looks like the Chancellor is set to freeze the pay of those working on the Covid frontline. And key workers right across the country are still waiting to hear if they’ll get the £10 an hour minimum wage they deserve.

Any move to freeze pay would be another short-sighted and irresponsible decision by this Chancellor. It will leave firefighters, hospital porters and teaching assistants worried about making ends meet ahead of Christmas. That means they’ll cut back on spending on our high streets and our small businesses and our economy – hit by the worst downturn in the G7 – won’t recover as quickly. Pay freezes have also been disastrous for our public services, leaving them unable to recruit the staff they need.

3. Murky new funding arrangements

As a member of the European Union, the UK benefitted from EU structural funds – the support available from Brussels and matched by governments here to reduce disparities of income, wealth and opportunity across Europe.  The government has promised to maintain equivalent levels of funding. That’s a big promise – the EU allocated £14.4bn to the UK between 2014 and 2020.

They’ve said they’ll be setting out more of it this week. The clauses in the controversial internal market bill that provide the legal basis for the new fund, as they stand, provide sweeping powers for ministers to make payments directly for a host of purposes. What we’ll be keeping a close eye on is the role for the devolved administrations, the role for local government and the full legal framework.  We don’t want a repeat of the scandals we’ve seen over procurement, with the government handing out money to Tory donors rather than buying the PPE we need.

And here’s four things we’d like to see…

1. Urgent action to retrain and reskill workers

Back in September, our Shadow Chancellor Anneliese Dodds set out Labour’s three key steps to a better, more secure future: recover jobs, retrain workers, and rebuild businesses. The Tories have spent months catching up with the priorities she set out – and on retrain workers they’re still far behind.

The government’s funding offer for skills for workers over 25 doesn’t start until April and by then some people will have been out of work for a year. The ‘kickstart’ scheme for younger workers, which our country so desperately needs to succeed, is already running behind schedule and into problems. Ministers urgently need to sort this out.

We’ll be looking for the Chancellor to make sure that the colleges we rely on to deliver training are properly resourced to do the job we urgently need them to do.  We’re also demanding the Chancellor backtracks on the spiteful decision to scrap the Union Learning Fund, one of the most effective bits of government spending there is. It isn’t too late for him to do the right thing.

2. A cleaner future

Infrastructure spending should be about equipping our economy for the future, not indulging Boris Johnson’s fondness for bridges. With Britain facing a jobs crisis, we need investment in the jobs of the future now. Action now to build it in Britain again, match the green ambitions of other countries and deliver a clean, jobs-rich recovery.

A fortnight ago, Anneliese Dodds and Ed Miliband set out Labour’s priorities for a clean, green economic recovery to confront the combined challenges of the unemployment and climate crises, and stimulate jobs and growth in every part of our country. By bringing forward £30bn in capital spending over the next 18 months and investing it in the clean industries of the future right across the UK, we can support at least 400,000 clean new jobs across the country.

3. Supporting the NHS to turn vaccines into vaccinations

The news that the Oxford and AstraZeneca vaccine is up to 90% effective and can be transported much more easily than the other two vaccines to have completed stage three trials was a great way to start this week. But as Jon Ashworth has rightly said: vaccines don’t save lives, vaccinations do.

Government must fund the NHS properly to deliver the vaccine to everyone who needs it, not hand over even more money to companies headed by Tory donors, companies that don’t really exist and companies that can’t do the job. We have a strong public health infrastructure in this country and the government should be resourcing it to do the job we need it to do. We expect there to be an announcement of funding for vaccination – but look for the detail of how it’s going to be spent.

4. Local services that work

In September, Keir set out the sort of country we want to build: the best country to grow up in and the best to grow old in. And that needs to be true right across Britain. In every part of our country, we need decent services we can all be proud of: children’s centres, schools, leisure centres, youth clubs, post offices and libraries. The local authorities that run so many of these services have been the front line of the pandemic just as much as the National Health Service and our supermarkets, but many of them are rapidly running out of money.

There is a huge gap – billions and billions of pounds – between the money councils have had to spend to deal with the pandemic and the money central government has allocated for them, despite an early promise from Communities Secretary Robert Jenrick that “the government stands ready to do whatever is necessary to support councils in their response to coronavirus”. If we’re not to see swingeing cuts to what remains of council-provided local services, we’ll need a clear package for councils on Wednesday.

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