Spending review 2020: the winners and losers in Sunak's statement

Denis Campbell, Robert Booth, Sally Weale, Patrick Butler and Dan Sabbagh
·8-min read

Denis Campbell, health policy editor, and Robert Booth, social affairs correspondent

The NHS in England has been given £3bn extra next year to tackle the huge backlog of operations cancelled because of Covid and the spike in mental illness caused by the pandemic.

Hospitals will spend around £1bn of the money trying to reduce the number of people who are waiting for non-urgent surgery, such as a hip or knee replacement or cataract removal, and the long delays that are becoming increasingly common. The number of people forced to wait at least a year for elective care has rocketed from 1,500 in February to almost 140,000 in September.

“Our world-class NHS has played a critical role in the response to coronavirus but we know how desperately difficult and distressing it has been for patients that are waiting to have operations and medical treatment during the pandemic,” said Rishi Sunak, the chancellor.

The £3bn is much less than the £10bn a year more that the British Medical Association and Health Foundation thinktank have said the service needed to cope with the rising demand for care.

The £1bn will fund the NHS to carry out up to one million more checks, scans and operations on people who could not get treatment in the spring when many non-Covid services were suspended.

Around £500m of the £3bn will go into expanding mental health care for people who could not access help when the pandemic struck. That money will be used to tackle both the backlog of adults referred for mental health care and to create new specialist services for under-18s. It should also help ensure faster access to “talking therapy” for people with anxiety and depression.

The £3bn will boost the Department of Health and Social Care’s budget by £6.6bn and mean that the NHS’s revenue budget in England in 2021/22 will be £136.1bn.

Cancer Research UK welcomed the £1bn to reduce waits for care and the £325m that has been earmarked for expanding diagnostic testing, including the replacement of old scanners, to detect cancer and other diseases.

Some of the money will also go into expanding the NHS’s workforce and improving training. However, health experts said the £3bn was inadequate. “This additional funding comes as the NHS faces the most difficult time in its history. Although welcome, it is not clear that this will be adequate to meet the enormous challenge ahead,” said Prof John Appleby, the Nuffield Trust thinktank’s director of research and chief economist.

Sunak also came under fire for increasing spending on the crumbling social care system by just £300m.

Care home providers said he had left a “black hole” in social care budgets with announcements of what he said was £2bn in additional funding. MPs, peers and the care sector have argued that even before the Covid crisis the government needed to increase spending on adult social care by £7bn to £8bn per year.

Councils have estimated that Covid has added a further £6.6bn in costs in just six months with costs soaring and occupancy falling. More than 18,000 people died from the virus in care homes.

Sunak’s offer falls well short of filling the void, the care industry said. Sunak announced £300m in new central government grants plus powers for councils to levy a 3% council tax precept to fund social care. Sunak said that adds up to £1bn in new money, but the Kings Fund thinktank said the precept does not guarantee money is raised where needed.

Vic Rayner, executive director of the National Care Forum, said the deal was “a catastrophe for social care” and said the funding was “completely and wholly inadequate – it can only lead to reductions in the provision of care”. Jeanelle de Gruchy, president of the Association of Directors of Public Health, said the absence of a budget increase for public health was “completely incomprehensible”.

Sally Weale, education correspondent

Headteachers responded with fury to the chancellor’s spending review, describing it as “a slap in the face” and “a body blow” for school leaders and their teams, who have worked tirelessly to keep schools open during the pandemic.

They were angry that the chancellor failed to provide any additional money to help schools with mounting Covid costs that are decimating budgets, and warned that a pay freeze would negate efforts to keep teachers in the profession after a decade of pay austerity.

Paul Whiteman, general secretary of the National Association of Head Teachers, said public sector workers, who had been on the frontline of the pandemic response, should not be forced to pay for the recovery out of their own pockets. “Keeping schools open is leaving school leaders frayed and exhausted. Today they and other public sector workers were looking for relief from the government.

“But the chancellor has not provided a single additional penny to cope with the costs of Covid. Salaries are being suppressed, Covid costs are being left unmet and the needs of the most vulnerable students are being ignored.” School leaders would be “justifiably furious”, he said.

Geoff Barton, general secretary of the Association of School and College Leaders, said: “The government asks more and more of teachers and leaders, and then effectively cuts their pay. It should not be surprised if staff decide to leave the profession.”

He welcomed confirmation of additional investment in schools through to 2023, but said any uplift in funding was being wiped out by the cost of Covid safety measures and teacher supply cover which the government has not yet reimbursed. “Many schools will be significantly worse off as a result of these additional costs and it is likely that they will have to make further cuts.”

Dr Mary Bousted, joint general secretary of the National Education Union, added: “The chancellor said he wants stronger public services but has delivered a body blow to staff in our schools and colleges. Education workers are key workers who have kept the country going during the pandemic, but pay cuts are their only reward from this government.”

Patrick Butler, social policy editor

The £3bn spending review boost for English councils from April is unlikely to fully cover the rising costs of coronavirus and social care costs or prevent major cuts to services in the coming months, local authorities have warned.

The chancellor said councils would receive a 4.5% increase in “spending power” next year – including £300m in social care grants, and £3bn to help councils meet Covid-related losses from business rates and council tax takings.

Ratepayers in England will see council tax bills rise by up to 5% from April after ministers allowed councils to raise up to £1bn through a special 3% local precept ringfenced for adults and children’s social care.

Cllr James Jamieson, the chair of the Local Government Association, said while extra financial support was welcome councils would “still have to find savings to already stretched budgets in order to plug funding gaps and meet their legal duty to set a balanced budget next year”.

Cllr David Williams, chairman of the County Councils Network and leader of Hertfordshire county council, said while the chancellor’s announcement would “ease the burden” on councils, many still faced “some difficult decisions next year on what services to reduce”.

Care England, which represents social care providers, called the £1bn boost a “drop in the ocean” compared with the pressures on care budgets. “Of course £1bn is welcome, we welcome every penny but, in comparison with the NHS and the challenges that the sector faces, this figure is too little and too late,” said the chief executive, Martin Green.

Dan Sabbagh, defence and security editor

Specialist Met police and MI5 officers will come together in a new Counter Terrorism Operations Centre to improve coordination between investigators tackling the violent threat from Islamism and the far right.

The plan was quietly announced in the detail of Sunak’s spending review, although Whitehall sources said it had been a couple of years in development and was originally a response to the string of terror attacks in 2017.

Specialist police and spies will gradually relocate from Scotland Yard and Thames House to a new London building, whose location is not yet disclosed, although it is expected to take five years before it is fully operational.

Independent reviews have said that while the Met and MI5 generally work well together there remain areas of difficulty, including “non-integrated systems” as reported by Lord Anderson last year.

Previously MI5 has acknowledged in evidence to parliament: “If we are honest at the moment we have a spirit of partnership and a sort [of] professional esprit de corps that is up here and we have IT connectivity that is kind of [down] here.”

Prosecutors and other specialists are expected to join the centre, but the organisation will not have its own head – and while investigators will work side by side they will continue to report to their separate agencies.

Britain’s intelligence agencies will also receive £173m more in 2021/22, which the Treasury said amounted to “a 5.4% average annual real-terms increase since 2019-20” – plus £1.3bn capital investment for the next three years. The extra cash is shared between MI5, MI6 and GCHQ, whose individual budgets are kept secret.

As announced by Boris Johnson, the prime minister, last week, defence enjoyed one of the biggest cash increases of any Whitehall department. The £41.5bn defence budget will increase by £24bn over the next four years, including £6.6bn of R&D.

Defence spending would grow by “1.8% per year” above inflation to the end of the parliament in 2024, ending years of real-terms cuts that began when David Cameron came to office in 2010.