FTI Consulting Public Affairs Snapshot – The Spending Will Continue: The 2020 Spending ReviewDownload a PDF of this article
In normal times, yesterday’s spending review would have been the moment for a first-year government to give effect to its manifesto, funding Whitehall departments to deliver on promises made to the electorate. On the face of it, that is exactly what yesterday’s announcements from the Chancellor did. But these are not normal times and this was not a normal spending review. Thanks to Covid-19, public sector borrowing stands at a level simply never seen in peacetime before. The reality is, for as long as the crisis persists, the Chancellor has little choice but to keep the money flowing. These announcements signal this will continue for some time. But, though we’re not being asked to pay the bill just yet, we now know roughly how big it will be, and that – at some point – payment will involve pain.
By any measure, Chancellor Rishi Sunak has had a good crisis. Plucked from the relative obscurity of junior office in February, he was pivoted head first into the greatest national emergency since the Second World War. As Covid-19 wreaked havoc through the health service and then the economy, Sunak launched intervention after intervention that were exceptional in scope and unprecedented in scale. As a result, while the stock of many of his cabinet colleagues (not least the Prime Minister) has suffered, Sunak’s star has only risen on a wave of generosity – but as you sow, so shall you reap.