Spending review shift throws uncertainty over future of UK funding

Government’s decision to set out one-year budget ‘not surprising’ but creates questions over key reforms

October 23, 2020
Road leading into mist
Source: Kseniya_Milner/iStock

Plans to boost UK research funding and reform post-18 education in England have been thrown into uncertainty after ministers abandoned their intention to set out government spending for the next few years.

The Treasury said that “in order to prioritise the response to Covid-19”, it would instead be conducting a one-year review of departmental spending, to be announced next month.

It creates uncertainty about major plans, announced only in March, to boost research spending to £22 billion by 2024-25. The details were expected to be set out in the multi-year review.

Andy Westwood, professor of government practice at the University of Manchester, said the decision was “not entirely surprising” given the economic upheaval wreaked by the pandemic, but it did “put a lot of spanners into a lot of government plans”.

On research, he said there had been hopes that annual research spending would hit the £18 billion mark – representing the doubling promised by the Conservatives’ last election manifesto – during the review period, “but that now can’t be set out”.

However, some of the early increases in research spending had “already been baked in” to departmental budgets for this year following announcements made in March.

Graeme Reid, chair of science and research policy at UCL, also emphasised that some of the money was already “in the pipeline” and working its way through the system.

He added that the Treasury’s announcement also left open the possibility that longer-term spending could be mapped out too, given that it mentioned that the new review would “confirm multi-year capital spending for key programmes where certainty is needed to ensure no time is lost in delivery”.

In his statement, the chancellor, Rishi Sunak, does not mention research as an example of an area where it would set out future budgets – instead talking only about areas “which are the cornerstone of our society, like the NHS, schools and infrastructure”.

But Professor Reid said research investment technically counted as capital spending and so could still be included in this.

“We just don’t know whether bits of R&D will be included in the long-term planning or whether the whole lot will be confined to the one-year rollover,” he said.

On post-18 education reform, Professor Westwood said the move to a one-year budget made it “almost impossible” to properly flesh out some of the government’s plans, such as rebalancing funding towards further education and changing the loan system.

“Furthermore, it may well be dawning on the Treasury, at least, that the post-18 issues are going to get much harder as the pandemic is already wreaking havoc on the labour market…and therefore on likely [loan] repayment rates for graduates over the next few years. Even more drastic reforms may be required when all of this is over,” he said.

Jonathan Simons, head of education practice at public-sector consultants Public First, said he thought there would still be a White Paper response to the Augar review of post-18 education in England, but “it’s hard to say how you could theoretically amend tuition fees or allocate more money to FE – all of which will span multiple years – when you don’t have a multi-year budget.

“My hunch is the White Paper will be stronger on rhetoric and weaker on policy and funding changes now.”


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