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Fiscal events update: Comprehensive Spending Review and Budget

Fiona Geskes Principal Policy Adviser

CBI submits representations for the Spending Review, but the Autumn Budget has been cancelled

01 Oct 2020, 3 min read

While we headed into the Autumn expecting two fiscal events – a Comprehensive Spending Review (CSR) and an Autumn Budget – the uncertainty surrounding the pandemic meant that there was a chance they wouldn’t happen. And last week, following the Winter Economy Statement, the government confirmed that the Autumn Budget has been cancelled. What this means for the Finance Bill, and for the open tax consultations (Business Rates, R&D tax credit) is unclear. What we do know is that the government has to deliver a Budget per financial year (by the end of March 2021) so we are likely to start next year the same as this year: with a full Budget.

While the Budget has been cancelled, the CSR is still set to take place. And there is a little more certainty around the CSR: it must take place before 1 December 2020 for local authority funding reasons (and because the then-Chancellor Sajid Javid only delivered a one-year spending round last year). But we don’t know when specifically it will be delivered.

Nonetheless, the CBI submitted its representations on 24 September – with thanks to all the member businesses who fed in: your insight and intelligence was invaluable. In line with member thoughts and concerns, the priorities in the CBI’s Comprehensive Spending Review submission were:


1. Prioritising jobs and skills

  • Turn the Apprenticeship Levy into a Skills and Training Levy
  • Provide all adults with an entitlement to their first level 2 and 3 qualifications for free.

2. Levelling up economic opportunities

  • Create an infrastructure bank to replace the European Investment Bank
  • Make all maintenance-based funding in local transport formula based
  • Urgently consult on the future of the UK Shared Prosperity Fund
  • Use the upcoming Green Book review to embed a programme approach to project delivery.

3. Improving outcomes in public services

  • The Cabinet Office should conduct a review of the implementation and impact of the Social Value Framework and how it has been used in practice across the public sector. This should include publicly available case studies of best practice
  • Clear priorities for what the next iteration of the outsourcing playbook and the upcoming Procurement Green Paper should include.

4. Improving the wider business environment

  • An ‘Invest to grow’ scheme of productivity vouchers for SMEs to be spend by 2022 on digital technologies, learning from the success of Eat Out to Help Out scheme
  • Investing in HMRC to ensure the department is sufficiently resourced to provide businesses with greater upfront certainty over their tax affairs and to respond on a timely basis to matters which can have a significant impact on business cash flow.

5. Making the UK a scientific superpower

  • The UK government should set out an ambitious vision and strategy for the future of UK research and innovation
  • BEIS should establish a dedicated council within UKRI to provide a clear home for technology diffusion in government
  • Introduce a variant of the Contracts for Difference (CfD) auction, with a variable cost for the production of hydrogen and a fixed payment to cover the CAPEX cost both the construction and operational phases of new nuclear power stations
  • Introduce a privately financed Regulatory Asset Base model for the transport and storage element of carbon capture infrastructure to encourage competition, reduce risk and provide greater incentive to build and reduce costs over lifetime construction.

6. Strengthening the UK’s place in the world

  • DIT, UKRI and BEIS should work together to develop a compelling, global pitch setting out 'why the UK is the best place to locate and grow your R&D activity'
  • Create an independent Office for Trade Impact such as in Australia and the USA
  • To tackle the national security challenges the UK will face in years to come, the government should create a new Defence and Security Industrial Strategy (DSIS) which will provide a long-term strategic vision for the defence sector.

7. Improving management and delivery of the government’s commitments

  • The government should require the IPA to act as a conduit to coordinate the existing investor relations functions that exist in other government departments
  • Create an Office for Sustainable Aviation Fuels
  • Use the Spending Review to appropriately resource regulators with major digital portfolios, to enable them to cope with an expanding digital remit. This will ensure that regulators can better embed technical expertise and develop practicable and futureproof regulation, for example Ofcom’s expected online harms regulatory remit.
  • Create a new ‘watchdog’ to oversee the performance of the UK’s economic regulators in delivering the strategic goals for the UK economy including innovation and net zero transition.

The full CBI CSR submission will be published in the next few weeks, but please get in touch if you have any questions in the meantime.