A spending review, or occasionally a comprehensive spending review, is a governmental process in the

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carried out by

HM Treasury His Majesty's Treasury (HM Treasury or HMT), and informally referred to as the Treasury, is the Government of the United Kingdom’s economic and finance ministry. The Treasury is responsible for public spending, financial services policy, Tax ...

to set firm expenditure limits and, through public service agreements, define the key improvements that the public can expect from these resources. Spending reviews typically focus upon one or several aspects of public spending while comprehensive spending reviews focus upon each government department's spending requirements from a zero base (i.e. without reference to past plans or, initially, current expenditure). The latter are named after the year in which they are announced – thus ''CSR07'' (completed in October 2007) applies to financial years 2008–2011. Other developed countries have similar review processes, e.g.

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, the

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, and

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. France conducted its first comprehensive spending review (called in French "''la Révision Générale des Politiques Publiques''") in 2008. The Netherlands has been carrying out spending reviews since 1981. As a consequence of the

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, the 2020 review covered just a one-year period in contrast to previous years. The 2021 spending review was subsumed into the October 2021 budget.

2002 Spending Review

The 2002 Spending Review (SR02) set a target for expanding the role of

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organisations in the provision of public services, anticipating growth by 5% in the period to 2005-06.

2007 Comprehensive Spending Review

The UK's 2007 Comprehensive Spending Review (CSR07) included three significant changes. The first was that it represented the first test of the capacity of the Spending Review process to plan and deliver a discretionary fiscal consolidation in the UK. The previous four Spending Reviews had taken place during periods of steady public growth in the economy from 37% in 1999–00 to 42% by 2007–08. As both the UK's then fiscal rules (the "

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" and the sustainable investment rule) began to bite, the UK government desired to halve the real rate of growth in public spending from 4% per annum over the last decade to 2% per annum over the next three years – a 0.5% below than the trend rate of growth of the economy. A second noteworthy development in the 2007 CSR was a marked extension in the certainty that the UK system provided to public sector managers about their future budgets. Finally, CSR07 saw the UK's public service 110 largely departmental-based Public Service Agreements consolidated into 30 inter-departmental agreements. The review aimed to achieve savings of £35 billion. During 2009, the National Audit Office undertook a series of reviews of departmentally-reported CSR07 value for money savings.

2010 Spending Review

A spending review for the years 2011/12 through to 2014/15 was announced by the

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. This review was driven by a desire to reduce government spending in order to cut the

budget deficit Within the budgetary process, deficit spending is the amount by which spending exceeds revenue over a particular period of time, also called simply deficit, or budget deficit, the opposite of budget surplus. The term may be applied to the budg ...

Chancellor of the Exchequer The chancellor of the exchequer, often abbreviated to chancellor, is a senior minister of the Crown within the Government of the United Kingdom, and the head of HM Treasury, His Majesty's Treasury. As one of the four Great Offices of State, t ...

George Osborne announced the details of the spending review on 20 October 2010. The cuts were described as the biggest since World War II. The review led to an £81 billion cut in public spending in the following 4 years of the parliament, with average departmental cuts of 19%. In addition major changes in welfare were announced including £7 billion of extra welfare cuts, changes to incapacity benefit, housing benefit and tax credits and a rise in the state pension age to 66 from 2020. Public sector employees would face a £3.5 billion increase in public pension contributions. The

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faced cuts of 25%, local councils would face a yearly 7% cut in funding from central government each year until 2014. The

Ministry of Defence A ministry of defence or defense (see American and British English spelling differences#-ce.2C -se, spelling differences), also known as a department of defence or defense, is the part of a government responsible for matters of defence and Mi ...

faced cuts of around 8%. DEFRA withdrew funding support from seven waste management PFI projects where least progress had been made with contract

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and obtaining planning permission, on the basis that the UK’s 2020 landfill diversion targets set by the EU could still be met without the curtailed projects. The government argued that the withdrawal of funding credits reflected "reasonable assumptions", and a legal challenge by

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and Cheshire West and Chester Councils against the DEFRA decision was unsuccessful. In addition many other public sector bodies saw cuts to their funding. Although not part of government, the

BBC The British Broadcasting Corporation (BBC) is a British public service broadcaster headquartered at Broadcasting House in London, England. Originally established in 1922 as the British Broadcasting Company, it evolved into its current sta ...

had its licence fee frozen for 6 years and took on the funding of the

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, BBC Monitoring and S4C. The

Office for Budget Responsibility The Office for Budget Responsibility (OBR) is a non-departmental public body funded by the HM Treasury, UK Treasury that provides independent Economic forecasting, economic forecasts and independent analysis of the public finances. It was formal ...

predicted that the spending review led to a loss of about 490,000 public sector jobs by 2015. The

NHS The National Health Service (NHS) is the term for the publicly funded health care, publicly funded healthcare systems of the United Kingdom: the National Health Service (England), NHS Scotland, NHS Wales, and Health and Social Care (Northern ...

saw a 0.4% increase in spending in real terms over the following 4 years. A £200 million payment was announced to compensate savers in the collapsed savings society Presbyterian Mutual. A report published in late 2013 by Trust for London and the London School of Economics and Political Science estimated that local government budgets in London had taken a 33% real terms cut in central government funding for local government between 2009/10 and 2013/14.

2015 Spending Review

A spending review for the years 2016–17 to 2020-21 was announced by chancellor George Osborne alongside an Autumn Statement on 25 November 2015.

2020 Spending Review

Chancellor

Rishi Sunak Rishi Sunak (born 12 May 1980) is a British politician who served as Prime Minister of the United Kingdom and Leader of the Conservative Party (UK), Leader of the Conservative Party from 2022 to 2024. Following his defeat to Keir Starmer's La ...

delivered his first spending review on 25 November 2020. In contrast to previous years, and as a consequence of the

, the review covered a one-year period from 1 April 2021 to 31 March 2022.

2021 Spending Review

The 2021 spending review (SR21) was subsumed into the October 2021 budget. SR21 set departmental resource and capital budgets from 2022-23 to 2024-25 and covered the devolved administrations' block grants for the same period of time. Chancellor Jeremy Hunt's Autumn Statement of 17 November 2022 referred to the maintenance of committed budgets "for the remaining two years of this Spending Review", and similarly his March 2024 budget speech was described as "sticking to the plan".

2024 Spending Review

On 29 July 2024, and after Labour had won the 2024 general election, Chancellor Rachel Reeves launched a new multi-year spending review, noting that the Conservative government had not undertaken a spending review since 2021 (above) and that "unfunded" and "undisclosed" overspending of £21.9bn had created a need to make "a necessary and urgent decision" on government expenditure. She announced that spending reviews would now take place in alternating years, in each case with a minimum planning horizon looking three years ahead. The first phase of the Spending Review set the budgets for government departments for 2024-25 and 2025-26, while a second phase of the review, set to make further "difficult choices", is scheduled for completion in spring 2025. Among the decisions Reeves referred to in July 2024 were to remove winter fuel payments from pensioners not receiving pension credit (roughly around 10 million people), and to cancel several road and rail infrastructure projects. Shadow Chancellor Jeremy Hunt dismissed Reeves' claims as "spurious", and argued that details of all government spending had been released by the

2025 Spending Review

The 2025 spending review, on 11 June 2025, will allocate funding for three future fiscal years, from 2026-2027 to 2028-2029, or for capital spending four fiscal years to 2029-2030.

References

External links

*Justin Tyso
Implementing a 'Spending Review' -- Italy Seeks to Improve the Quality of Public Expenditure
International Monetary Fund, 12 November 2007 *Richard Hughe

International Monetary Fund, 5 May 2008
Guardian Special Report - Spending Review 20102004 Spending ReviewSpending Review and Autumn Statement 2015 (Archived)
{{United Kingdom budget Government spending in the United Kingdom United Kingdom budgets