While the long-awaited multi-year spending review has been postponed until 2020, the government has to undertake a one-year spending review this year to ensure departmental funding does not run out in April 2020.
The Chancellor recently confirmed that this would be taking place in early September; a sign that government very much wants to conduct this review quietly. And while there was no formal submission period, the CBI still submitted a number of recommendations for a one-year period to ensure business priorities were clear. Business would have clearly preferred a multi-annual spending review, providing greater clarity on government strategy and certainty for business decision making. But even in a one-year period, there are a number of areas where government action is urgently needed. And above all else, what is vital is government demonstrating that the domestic agenda is still of high importance.
What the CBI has called for
The regional council round in Q2 and countless member meetings in between crystallised key priorities for business:
- Investing in our people to meet the challenges of our economy. This includes setting per funding for colleges and sixth forms on a path to reaching spending levels observed in 2011/12 and protecting per pupil funding in schools as well as ensuring the Apprenticeship Levy is solvent for the next year and to maintain the rate at which firms currently pay the Apprenticeship Levy at 0.5%
- Turbo charging local transport and infrastructure spending, by making all maintenance-based funding in local transport formula based, ensuring scarce local authority funding is not wasted on bidding for small maintenance contracts. Government must also follow through on commitments to deliver crucial large infrastructure projects including HS2 and responding to the NIA and commit to the agreed fiscal mandate of 1.2%. The government should also invest in the Outside In initiative to deliver full fibre connectivity across the UK
- Ensuring the UK reaches it net zero target and becomes a world leading low carbon economy. This must include funding for electrical vehicles plug in infrastructure in rural areas, and funding for a new business consultancy service to support business of all sizes with information about energy efficiency measures they can take
- Accelerating research and development funding by increasing departmental R&D spend across the government, and funding programmes through the Industrial Strategy Challenge Funds
- Backing the Industrial Strategy, by giving the Industrial Strategy Council statutory powers (similar to the OBR) to independently monitor and evaluate the government’s industrial policy. The government should also ensure the British Business Bank is adequately funded so it can provide finance for businesses across the UK
- Supporting business to export by ensuring trade policy capacity is scaled up across the government departments and fund SME export support schemes.
What to expect and how you can feed in
The Chancellor is set to deliver the ‘results’ of the Spending Review in September. The CBI will be responding and summarising what the announcements mean for business, so watch out for that on My CBI.
Given the multi-annual Spending Review is set to take place next year, the CBI will be starting the consultation process for that with members in January 2020. The next big fiscal event will be the Autumn Budget, for which we will be updating members soon.
If you have anything you would like to feed in for that, please contact Fiona Geskes.