Summary leaflet: Investing in strong public services
Having put in place a platform of economic stability and fiscal prudence, the Government is tackling the legacy of under-investment in our infrastructure and our public services to build a Britain where there is opportunity and security for all.
The Spending Review - which sets new plans for public spending for the three years from 2001-02 to 2003-04 - has been about making sure that the money we spend is used wisely to deliver strong and dependable public services.
Over half of the rise in spending on public services over the next three years will go to education and health, and a further 20% to transport, housing and law and order. Together these priority areas will account for more than 75% of the rise in spending.
From 2000-01 the new plans will see, over and above the cost of inflation:
- 5.4% growth a year on average in UK education spending
- 20% growth a year on average in transport spending in England
- 4.2% growth a year on average for the criminal justice system in England and Wales
In addition, the Budget announced rises in health spending averaging 6.1% a year in real terms over the four years from 1999-00.
The Government can afford these increases because of its prudent handling of the economy. In particular, the Government's success in cutting the cost of borrowing and reducing the number of people unemployed has freed up more resources for key public services.
By 2003-04 debt interest payments will be £5 billion a year lower than in 1997-98. Despite increasing spending and tax credits by an extra £7 billion a year on children and £2.8 billion a year on pensioners from next year, social security spending is rising on average by only 1.2% a year over the period 1997-98 to 2001-02, compared to 4% in the period 1992-93 to 1996-97.
Extending opportunity to all...
The Review aims to build a fairer more inclusive society that extends opportunity to all. Among other measures, it:
- commits further new resources to education so that everyone has the opportunity to get the skills and training they need;
- real increases for UK education - a growth rate of 5.4% a year in real terms over three years and 6.6% over four years with the extra boost in 2000-01 announced in the Budget. This is the highest growth in education spending over a four year period for 20 years;
- rising attainment, with demanding new targets for 11 and 16 year olds in literacy, numeracy, science and ICT
helps to ensure employment opportunities for all by expanding policies that have delivered the lowest rate of unemployment for 20 years; enhancing the New Deal, providing more intensive support to unemployed people and increasing help for parents and disabled people to move from welfare to work;
- helps to ensure employment opportunities for all by expanding policies that have delivered the lowest rate of unemployment for 20 years; enhancing the New Deal, providing more intensive support to unemployed people and increasing help for parents and disabled people to move from welfare to work;
- funds extra resources aimed at those in greatest need and at crucial stages in life, including:
- doubling the number of Sure Start programmes to provide help for a third of poor children under the age of four
- a new Children's Fund worth £450 million over three years to provide extra help for vulnerable young people and engage the voluntary sector in the battle against child poverty.
The Review aims more resources at narrowing the gap between our most deprived communities and the rest, for the first time setting specific targets to reduce the disparity in health, education, crime and employment prospects. £800 million over three years in a new Neighbourhood Renewal Fund will help deliver this.
Responsible, secure communities...
To deliver strong and secure communities the Review:
- provides for increased spending on the criminal justice system, with police funding rising by 3.8% in real terms on average a year to cut vehicle crime rates by nearly a third and burglaries by a quarter
- provides for the longest period of sustained funding growth for the NHS in its history - an average of 6.1% real growth a year over the four years from 1999-00 combined with reform to tackle variations in efficiency, performance and health outcomes
- establishes a new Drugs Treatment Agency, focusing help on getting addicts to kick the drugs habit
- invests in social housing, with an extra £1.6 billion a year by 2003-04 going to build new homes and maintain existing council housing at a decent standard
- gets more people active in their communities, with a new Experience Corps helping older people to pass on their skills and knowledge
- provides additional funding to help schools get children into the sporting habit, laying foundations for a healthy lifestyle and developing our future champions
- provides new resources to help the rural environment, agricultural restructuring and the wider rural economy.
Raising productivity and sustainable growth...
The Government is committed to closing the productivity gap with our major competitors. The Review
- more than doubles public investment in our transport infrastructure over the next three years to deliver the first stage of the 10 year plan for transport.
Extra transport investment will mean:
- reduced congestion - fewer traffic jams - on our busiest roads
- better, more reliable trains
- a renaissance in local public transport and a step improvement in transport for London
- strengthens UK science and engineering, with an average 5.4% real growth a year in spending to:
- allow £1 billion for new laboratories and equipment, in partnership with the Wellcome Trust
- step up research in key areas like the human genome
- do more to turn scientific knowledge into jobs and wealth
- introduces measures to enhance enterprise, with a flexible funding package for the new Regional Development Agencies worth £500 million extra a year by 2003-04 to help them improve regional economic performance
A modern international role for Britain...
The Government is committed to establishing a modern role for Britain in the world, playing our part in securing democracy, reducing conflict, and combatting disease, famine and illiteracy.
The Review delivers:
- a real terms increase in defence spending - the first budgeted real increase for more than a decade - delivering better equipped forces able to play a full role in the post-Cold War World
- 6.2% real terms average growth a year in resources to tackle poverty in the developing world
- UK leadership of the effort to tackle the debt burden of the poorest countries. Already nine countries have qualified for debt relief totalling $16 billion; a further 11 should qualify before the end of the year
- enhanced trade and cultural promotion, with more help for British exporters
- innovative new funds bringing together the key departments to work more effectively to prevent conflict in Africa and elsewhere
- by 2003-04 spending on the BBC World Service will be £36 million higher, with £24 million more for the British Council, to make them better able to promote Britain abroad through the use of modern technology and the internet
Driving up performance...
Overall the Government will be spending over £440 billion a year by 2003-04.
To ensure that resources are matched by results, alongside the plans a new Public Service Agreement has been drawn up for each department setting out the objectives and targets which the Government will deliver in return for this investment.
- The targets are challenging and transparent, allowing the public to judge for themselves how performance is improving
Interdepartmental studies in the Review have examined how to improve co-ordination across Government.
- Studies have looked at how to tackle issues, like how best to help young people at risk, which cut across administrative boundaries
The Review sets quantified productivity targets to ensure departments work to secure better value for money.
- Over the three years from 2001-02 to 2003-04, £4 billion a year of unneeded assets will be sold, releasing resources for new investment. The costs of Government administration will fall as a share of total spending
The benefits of stability and long-term planning have been extended across the public sector.
- Local authorities as well as Government departments will now have greater certainty about their funding allocations for three years ahead, allowing them to plan ahead with confidence
More investment for the future is being levered in:
- The review more than doubles net public investment in our infrastructure over the next three years to £19 billion, delivering modern transport, schools and hospitals
- Present forecasts are that PFI deals to the value of around £12 billion will be delivered by 2003-04
Sound public finances...
The Review has allocated resources within the prudent envelope for overall spending announced in the March 2000 Budget:
- 21/2% a year real growth in current spending from 2000-01, in line with the Government's central view of the economy's trend rate of growth
- a more than doubling of net investment, rising to 1.8% of Gross Domestic Product by 2003-04
These limits are consistent with the Government's two strict fiscal rules:
- the golden rule: over the economic cycle, the Government will borrow only to invest and not to fund current spending; and
- the sustainable investment rule: public debt as a proportion of national income will be held over the economic cycle at a stable and prudent level
The Government's fiscal policy framework has restored the public finances to a healthy and sustainable position. The Government remains firmly on track to meet the fiscal rules, including on more cautious assumptions for the performance of the economy.
The Government has been prudent for a purpose: to reduce the cost of worklessness and debt in order to release resources in this review for frontline public services.
To order further copies of this leaflet, or obtain a Welsh language version or an alternative format, please telephone:0845 601 1041
More details of the new public spending plans can be found in 'Prudent for a Purpose: Building Opportunity and Security for All' available from the Stationery Office and good bookshops at £32.
Spending Review 2000 Index Page
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