Yesterday’s Spending Round…

I think the proposals outlined in George Osborne’s Spending Round which were unveiled yesterday in Parliament, have much to recommend them. The Chancellor described the economic situation in which the UK has found itself to be in transition, “from rescue to recovery” and George Osborne referred to various measures which will be implemented to continue this positive trajectory.

The freeze on council tax bills will certainly be welcomed by all. Equally, it makes sense that we are brought into line with other European countries with the news that jobseekers allowance claimants will have to wait 7 days before they can claim. It can only be beneficial for all concerned, that claimants will need to learn English (if they have not done so previously), in order to receive benefits too.

In other areas, I am pleased to hear that there is to be scheduled investment in the transport capital budget with it planned to rise by 5.5%. Increased budgets are promised for the Department for Business, Innovation and Skills (9%), the Department for Energy and Climate Change (3%) and also the Department for Education to £53 BN which is good news too.

Unfortunately with increased expenditure, in order to maintain an even keel, there must also be reductions. The Cabinet Office budget is scheduled to reduce by 10% and there will be an end to automatic pay progression (excluding the armed forces). Other areas of reduction include the budgets for the Foreign Office (-8%), the Home Office (-6%), Department for Communities and Local Government (-10%), HM Treasury (-10%) and HMRC (-5%).

Obviously we would all like to see increased investment across the board. However for the Chancellor to steer the UK’s ship through the unsteady economic waters, the kind of approach taken in the latest Spending Round is very necessary and on the back of this, I am hopeful that the next quarter’s economic growth figures will show positive results.

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