The Envision Partnership Blog

Insights, ideas and information.


Spending Review

Late November should have seen the Chancellor announce his Autumn Budget and a Comprehensive Spending Review covering the next three financial years. Like many other plans, the uncertainty created by the pandemic has put both on hold. In their place was a ‘Financial Statement’, primarily addressing a one-year Spending Review.The highlights of the Financial Statement were as follows:

· No tax announcements, although the Chancellor noted that “we have a responsibility … to return to a sustainable fiscal position”.

· Government borrowing projected to be £394 billion in 2020/21 before stabilising at around £100 billion from 2023/24 onwards. Total debt to remain over 100% of GDP.

· The Office for Budget Responsibility (OBR) says that “a fiscal adjustment of £27 billion” will be needed as a minimum in the medium term.

· New UK Infrastructure Bank to be established in the north of England to start work in spring 2021.

· Public sector pay to be frozen for a year, other than for NHS employees and those earning less than £24,000 a year.

· National Living Wage to increase by 2.2% to £8.91 an hour from April 2021 and the minimum age at which it applies is reduced to 23.

Overseas aid to be cut from 0.7% of GDP to 0.5% in 2021.

For further information on the Financial Statement and what this could mean in terms of tax increases click on the link below. 

Spending Review

Tax increases are inevitable but fortunately not in the short term, however future increases should be taken into consideration in your tax planning for the next few years.