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Spending Review: Chancellor outlines government spending plans

Reported by lily | November 26th, 2020 @ 12:37 AM

Spending Review: Chancellor outlines government spending plans

Chancellor Rishi Sunak is unveiling the government's spending plans for the coming year.

The Spending Review will include details on public sector pay, NHS funding and money for the devolved administrations in Northern Ireland, Scotland and Wales.

Mr Sunak will also set out the extent of the damage done to the UK economy by the coronavirus pandemic.

A No 10 spokesman said the economic forecasts will be "a sobering read".

The government's Covid response has led to huge spending and borrowing rises.

The chancellor is expected to begin his statement at around 12:30 GMT following Prime Minister's Questions.

Some Spending Review announcements have already been trailed.

These include an extra £3bn for the NHS in England to help tackle the backlog of operations delayed due to Covid, an increase in defence spending and a £4.6bn package to help the unemployed back to work.

The government is expected to announce a cut in the UK's overseas aid budget to 0.5% of national income, down from the legally binding target of 0.7%.

There have also been reports that the chancellor is considering a pay freeze for all public sector workers except frontline NHS staff.

Plans to change the way big spending projects are analysed - which the Treasury says is currently biased in favour of the south east of England - will be published alongside the Spending Review.

The chancellor may also choose to set aside money to tackle climate change and regional inequalities.

Devolved governments will receive money proportionate to any funding England gets in the Spending Review.

This is decided using the Barnett formula - devised by Lord Barnett, a Labour politician, in the 1970s.

Mr Sunak and Treasury Chief Secretary Stephen Barclay updated the Cabinet on Wednesday morning.

A Downing Street spokesman said: "Cabinet was told the OBR forecasts will show the impact the coronavirus pandemic has had on our economy and they will make for a sobering read, showing the extent to which the economy has contracted and the scale of borrowing and debt levels.

"But - as the IMF (International Monetary Fund), OBR and others have pointed out - the costs would have been much higher had we not acted in the way we have done."

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