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Chancellor Rishi Sunak has set what the UK government will spend on health, education, transport and other public services next year.
In a statement in Parliament, he also briefed MPs on the state of the UK economy and the latest forecasts for UK public finances, which have been hit by the Covid pandemic.
These are the main points.
- Millions of public sector workers will have their wages frozen next year
- One million NHS workers and those making less than £ 24,000 will still get a raise
- The UK economy is expected to contract 11.5% this year
- Unemployment is expected to reach 7.5% next spring, with 2.6 million people out of work
- The foreign aid budget will be reduced by approximately £ 5 billion
- A new £ 4bn “equalization” fund will pay for local infrastructure upgrades
Chancellor warns of ‘lasting’ damage to UK economy
Public sector payment
image copyrightPennsylvania
- Millions of public sector workers will see pay cuts in real terms next year as their pay is frozen
- But more than two million making less than £ 24,000 a year will get a minimum raise of £ 250
- More than a million doctors, nurses and other NHS workers will also see an increase
- The national living wage will increase by 2.2% to £ 8.91 an hour
- 23 and 24-year-olds will qualify for a living wage for the first time
Low-wage public sector workers will get a £ 250 pay raise
State of the economy
image copyrightPennsylvania- The economy will have contracted by 11.3% in 2020, the biggest drop in more than 300 years
- The economy is expected to grow 5.5% next year and 6.6% in 2022
- Production is not expected to return to pre-crisis levels until the fourth quarter of 2022
- Unemployment is expected to reach 7.5% next spring, with 2.6 million people out of work
- The debt forecast will hit £ 394 billion this year, equivalent to 19% of GDP, the highest in peacetime.
- UK debt will be equivalent to 91.9% of GDP this year and will increase to 97.5% of GDP in 2025/26
- In 2025, the economy will be around 3% smaller than expected in the March budget forecast
Unemployed are projected to rise to 2.6 million
Health and social insurance
image copyrightPA media- A total of £ 18 billion to spend on Covid tests, PPE and vaccines
- The health budget in England will increase by £ 6bn, including an additional £ 3bn for the NHS to deal with pressures from Covid
- £ 1 billion to address treatment delays and allow delayed operations to move forward
- £ 500 million for mental health services in England
- £ 325 million to replace aging diagnostic equipment such as MRI and CT scanners
- Extra grant of £ 300 million to welfare councils
£ 3bn to NHS, but Sunak warns of ‘economic shock’
Employment and business
image copyrightPA media- A new £ 4.6 billion package to help people get back to work
- £ 2.6 billion for the reset plan to help the unemployed for 12 months
- £ 1.6 billion for Kickstart scheme to subsidize youth jobs
- £ 375 million skills package, including £ 138 million to provide a lifetime skills guarantee
- New £ 4 billion “leveling” fund to finance local infrastructure improvement projects
- New UK infrastructure bank to be established in Northern England
- The commercial fee multiplier will be frozen in 2021-22
Sunak Commits To Making Jobs ‘Number One Priority’
International aid and defense
image copyrightPA media- The foreign aid budget will be reduced from 0.7% to 0.5% of total national income
- You will see a reduction of around £ 5bn in support to tackle global poverty
- UK will return to 0.7% target in 2022-23 if public finances permit
- A billion-pound increase in annual defense spending over the next four years, creating 40,000 jobs.
- New center dedicated to artificial intelligence
- National cyber force to counter terrorists, organized crime groups and hostile states
Defense funding push ‘extends British influence’
Schools, transportation, crime and town halls
image copyrightReuters- An additional £ 2.2 billion for schools in England, representing an increase of 2.2% per pupil
- An additional £ 2 billion for public transport, including subsidies for the rail network
- £ 3 billion in additional funding for local authorities, representing a 4.5% increase in purchasing power
- £ 250 million for municipalities to address the dream
- £ 4 billion over four years to provide 18,000 new prison places
- Over £ 400 million to recruit 6,000 new police officers by the end of 2022
Scotland, Wales and Northern Ireland
- £ 2.6 billion for decentralized administrations to drive Covid recovery
- £ 1 billion for the Scottish executive, £ 600 million for the Welsh government and £ 400 million for the Northern Ireland executive.
