Good morning. Today is the launch of the spending review. And the prime minister has been writing about the process.
Every secretary of state inherits dozens of projects and priorities from his or her predecessor, and a huge quantity of government activity is therefore being carried out even if it is no longer necessary or relevant. In one of my very first cabinets, I told them all to go through their budget lines and cut at least 5%. ‘It’s time to slaughter the sacred cows,” I said.
But that was not the current prime minister. That was Boris Johnson, in his memoirs.
As Heather Stewart, Kalyeena Makortoff and Richard Partington in their overnight story, Rachel Reeves, the chancellor, is also asking cabinet ministers to find efficiency savings equivalent to 5% of spending. That does not mean that her policy on public spending is exactly the same as Johnson’s. But this does illustrate how how this is a process that all governments end up going through.
Efficiency savings of 5% does not have to mean spending cuts worth 5%. Reeves has already announced that overall day-to-day government spending is due to rise by 1.5% a year in real terms. Efficiency savings (which often feel like cuts) in one area of departmental spending can free up money that can be spend in other areas.
But that does not mean the process will be painless. In its news release, the Treasury says ministers are being told the spending not contributing to a government priority should be stopped.
Secretaries of state across government will need to allocate their budgets to ensure that government spending is focused on the prime minister’s Plan for Change, and that every pound of taxpayers’ money is spent well. The chancellor will work with departments to prioritise spending that supports the milestones to deliver the plan …
In letters sent by the chief secretary to the Treasury, departments will be advised that where spending is not contributing to a priority, it should be stopped. Although some of these decisions will be difficult, the chancellor is clear that the public must have trust in the government that it is rooting out waste and that their taxes are being spent on their priorities.
The Treasury also gives an example of what this might mean.
Work has already begun on evaluating poor value for money spend, with an evaluation into the £6.5m spent on Social Workers in Schools programme, which placed social workers in schools, finding no evidence of positive impact on social care outcomes, meaning the intervention was not considered cost-effective. The government has made clear it will not shy away from taking the difficult decisions needed to fix the foundations, as shown by the Chancellor’s decisions at the Budget to balance the books.
The Social Workers in Schools progamme was an initiative started under a previous PM – one Boris Johnson. As he would put it, it’s now being slaughtered as a sacred cow.
Reeves is speaking at an event at a hospital this morning, so we will hear more from her soon. And we will hear more about the Plan for Change, because Pat McFadden, the Cabinet Office minister who oversees the plan, is giving evidence to committee later. It is one of several interesting hearings on the committee corridor.
Here is the agenda for the day.
Morning: Keir Starmer is in Cyprus, where he has a meeting with Nikos Christodoulides, the president, and addressing British troops at RAF Akrotiri.
Morning: Rachel Reeves, the chancellor, and Darren Jones, chief secretary to the Treasury, are visiting a hospital in Kent.
11.30am: Downing Street holds a lobby briefing.
12.30pm: MLAs (member of the legislative assembly in Northern Ireland) start a debate on whether or not to continue with the Windsor Framework post-Brexit trading rules.
1pm: Lisa Nandy, the culture secretary, gives evidence to the Commons culture committee about the work of her department.
2.30pm: Douglas Alexander, a trade minister, Stephen Doughty, a Foreign Office minister, and Lord Coaker, a defence minister, give evidence to the business committee about arms sales to Israel.
2.30pm: Chief constables from South Yorkshire police, Cleveland police, Staffordshire police and Humberside police give evidence to the home affairs committee about the summer riots.
3pm: Pat McFadden, the Cabinet Office minister, gives evidence to the public administration and constitutional affairs committee about the work of the Cabinet Office.
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