2000 Spending Review - Building opportunity and security for all

Services to provide opportunity and security for all - education, health, transport and fighting crime - are at the centre of the Spending Review results announced by Chancellor Gordon Brown today.

The Review sets departmental spending plans for the next three years. Alongside the new plans are tough, quantified performance targets setting out what taxpayers can expect for this investment. Fifteen cross-departmental reviews have tackled those issues which cross traditional departmental boundaries.

Within affordable ceilings for spending in line with the Government's prudent fiscal rules, the Review provides new funding and sets new targets to:

extend opportunity for all;
build responsible and secure communities;
deliver higher productivity and sustainable growth; and
secure a modern international role for Britain.

Key measures to deliver these objectives are:

building on substantial improvements already achieved, 5.4 per cent a year average real increases in funding for education over the next three years to modernise schools and deliver rising attainment in literacy, numeracy, science and information and communications technology (ICT). With the extra boost for education in 2000-01 announced in the Budget in March, this represents 6.6 per cent annual average real growth over the four years from 1999-2000, the highest growth over a four year period for 20 years;
the longest period of sustained funding growth for the NHS in its history combined with reform to tackle variations in efficiency, performance and health outcomes. The 2000 Budget announced annual real growth of 6.1 per cent in UK health spending over four years;
delivery of the first stage of the ten year transport strategy, with public investment doubling over the next three years to £6 billion to cut road congestion, enable the railways to carry more passengers and provide a better, more reliable service;
building on this Parliament's cut in crime, increases in spending on the police of an annual average of 3.8 per cent a year in real terms over the next three years to cut vehicle crime by nearly a third and burglaries by a quarter;
a radical new strategy for tackling the problems of deprived areas, underpinned by new floor targets to close the gap between the most deprived areas and the rest of the country; and a Neighbourhood Renewal Fund worth £100 million in 2001-02, £300 million in 2002-03 and £400 million in 2003-04 to ensure that these targets are delivered on the ground;
a major expansion in focused support for children in poverty - doubling the numbers of programmes under the Sure Start initiative from 250 to at least 500 by 2004, providing support for one third of all poor children under four years old; and establishing a new Children's Fund to help vulnerable young people avoid drug abuse, truancy, exclusion, unemployment and crime;
an Employment Opportunities Fund, worth £875 million in 2001-02 and increasing to £1.4 billion by 2003-04, to extend policies which have delivered the lowest rates of unemployment and highest rates of employment for over 20 years, allowing the ONE service to be delivered by the new working age agency, providing a one-stop shop for benefits and employment advice; and enhancement of the New Deal to improve opportunities for the long-term unemployed; and
enhancing the UK's world leading position in science, with a total of £1 billion Science Research Investment Fund to renew outdated laboratories and equipment and extra funding to step up research in key areas like the human genome and turn scientific knowledge into wealth and jobs.

Extending opportunity to all

The Review's aim has been to tackle poverty, deprivation and disadvantage at their roots in order to make sure that all our children have the best start in life and that everyone has the chance to fulfil their potential through education and employment. Reaffirming the Government's long term ambition to halve child poverty by 2010 on the way to eradicating it in twenty years, the Review:

delivers extensive real growth for education funding to modernise schools and deliver demanding new targets for literacy, numeracy, science and ICT;
helps adults who lack basic skills in literacy and numeracy;
makes the New Deal a permanent deal so more people can be helped off welfare and into work, and extends the ONE service nationally so that all new claimants will have a personal adviser to help them into employment; and
funds special interventions targeted at those in greatest need and at crucial stages in life, increasing funding for the Government's Sure Start programmes which make sure children start school ready to learn and boosting the Connexions personal adviser service for vulnerable young people.

Responsible and secure communities

The Review has allocated spending to help build communities which are strong and healthy and respect the environment, by tackling the causes of crime and drug abuse, by investing in a modern National Health Service, by encouraging volunteering and by helping people get more out of life by improving access to sport, music and the arts.

The Review:

targets crime reduction and criminal justice co-ordination with increases in criminal justice funding in England and Wales of 4.2 per cent in real terms on average a year to fund an end to end system for the delivery of justice;
establishes a National Treatment Agency for drug abusers, underpinned by a pooled drug treatment budget;
establishes Local Strategic Partnerships as part of Community Planning, to bring together service providers at the local level;
invests in social housing to build new homes and maintain existing council housing at a decent standard; and
provides new resources for measures to help the rural environment, agricultural restructuring and the wider rural economy.

High productivity and sustainable growth

Building on a platform of economic stability the Review helps to deliver high productivity through measures aimed at raising our levels of skills, enterprise and competition to the standards of the best, by delivering a fast and reliable transport system and by improving efficiency throughout our public services.

The Review:

more than doubles net public investment, renewing our public infrastructure and providing extra funding to improve IT and help ensure that citizens get modern, responsive, high quality services from government;
doubles capital investment in transport to over £6 billion by 2003-04 as the first stage of the Ten Year Transport Plan. This will include a new programme of improvements to reduce congestion on our busiest roads and raise railway spending to meet sharply increasing demand, to provide better quality, more punctual, faster, safer and more reliable journeys. There will be increased investment to deliver a step change in transport for London and a renaissance in local public transport;
enhances the UK's world leading position in science with increased spending including a new £1 billion capital programme over two years in partnership with the Wellcome Trust to invest in modern laboratories and equipment. Overall there will be 5.4 per cent a year real terms growth on average in spending on science and engineering to 2003-04; and
provides a flexible funding package for the Regional Development Agencies raising the budget to £1.7 billion a year by 2003-04 to help them play their part in levering up economic performance in their areas.

A modern international role for Britain

The Review is investing in a modern defence capability helping to secure peace, democracy and security, and in overseas aid to help combat disease, famine and illiteracy in the poorest countries and by working to prevent conflict in Africa and elsewhere.

The Review:

provides 6.2 per cent a year average real terms increases in resources to tackle poverty in the developing world;
provides the first budgeted real terms increase in defence spending for a decade, equipping the Armed Forces to play a full role in the post-Cold War world;
puts new resources into the BBC World Service and British Council to help them promote Britain abroad through the use of modern technology and the internet;
sets up new cross-departmental budgets for conflict prevention in sub-Saharan Africa and the wider world underpinned by joint working arrangements, to ensure that the UK meets its obligations in an efficient and effective way.

Delivering stability and sound public finances

The Government has stuck to the firm spending envelope for the next three years set in Budget 2000, fully consistent with meeting its fiscal rules.

Resource (current) spending will increase by 2.5 per cent a year in real terms and net investment will double to 1.8 per cent of GDP by 2003-04.

Within these limits, the Government has been able to increase resources for frontline public services in the Review as a result of savings on debt interest payments and social security spending:

social security spending and tax credits grew at 4 per cent a year in real terms over the last Parliament (1992-93 to 1996-97) but will grow by only 1.2 per cent a year over this Parliament. This is despite spending an extra £7 billion a year in real terms on children and £2.8 billion a year more by next year on pensioners; and
fraud and error in income support and Jobseekers' Allowance will be cut by 25 per cent by 2003-04, rising to 50 per cent by 2006. By 2003-04 the cost of paying interest on government debt will be £5 billion a year lower than in 1997-98.

The Government can afford extra resources for priority public services because of its prudent economic management. The Government remains firmly on track to meet the strict fiscal rules, including on more cautious assumptions for the performance of the economy.

Notes for editors

1. The new spending plans are detailed in the White Paper Prudent for a Purpose: Building Opportunity and Security for All' available from the Stationery Office and good bookshops at £32.

2. General press enquiries can be made to the Treasury press office on 020 7270 5238 or the individual government departments.