HM Treasury

Spending Review

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:

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:

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:

Raising productivity and sustainable growth...

The Government is committed to closing the productivity gap with our major competitors. The Review

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

- 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

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 combating disease, famine and illiteracy.

The Review delivers:

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.

Interdepartmental studies in the Review have examined how to improve co-ordination across Government.

The Review sets quantified productivity targets to ensure departments work to secure better value for money.

The benefits of stability and long-term planning have been extended across the public sector.

More investment for the future is being levered in:

Sound public finances...

The Review has allocated resources within the prudent envelope for overall spending announced in the March 2000 Budget:

These limits are consistent with the Government's two strict fiscal rules:

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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