A Brief History of Spending Reviews

Spending Reviews, or sometimes Comprehensive Spending Reviews, were introduced by the New Labour government in 1997-98.

Timetable

They set Departmental Expenditure Limits (DEL) for 3 years in advance.

They were usually published in July the year before the plans started – so the 1998 CSR published in July 1998 covered the three fiscal years starting 1 April 1999.

The framework for each Spending Review – that is a statement of how much the government intended to spend in total over the next three fiscal years – was usually set in the autumn Pre Budget Report preceding the Spending Review announcement.

Purpose

The first Review stated that “firm three year plans have been set for departments to enable them to plan ahead and to provide a more stable foundation for managing public services.”

The 1998 and 2007 Reviews were later stated to have been “strategic” whereas the other reviews were not.

Contents

Each Spending Review usually contained some introductory chapters setting out the governments overall plans and policies for the economy and public spending, followed by separate chapters for each of the Spending departments and Devolved Administrations (from 2002). Annexes usually set out more spending details.

Legal Status

Spending Reviews have no legal status and do not set actual budgets, these are enacted on a annual basis through the usual Budget process every March.

Fiscal Rules

Under the Labour government Spending Reviews were conducted within a set of fiscal rules that allegedly limited how much, in total, could be spent. These were:

  • The Golden Rule states that over the economic cycle, the Government will borrow only to invest and not to fund current spending.
  • The Sustainable Investment Rule stated that borrowing should be kept to a “prudent” level, set at 40% of GDP

Public Service Agreements

The government stated that the spending set out in the Reviews was “investing in reform” and that departments would be set clear targets to be achieved in exchange for the resources they were being given. These took the form of Public Service Agreements (PSAs). PSAs were usually published separately from Spending Reviews.

The Reviews

Comprehensive Spending Review – July 1998

Covers the spending years 1999-00 to 2001-02.

Included a cross-departmental review of provision for young children.

Spending Review 2000 – July 2000

Covering the spending years 2001-02 to 2003-04

Included 15 cross-departmental reviews

2002 Spending Review – July 2002

Covering the spending years 2003-04 to 2005-06

Included 7 cross-departmental reviews

2004 Spending Review – July 2004

Covering the spending years 2005-06 to 2007-08

No cross-departmental reviews.

The ‘Gershon’ efficiency report published alongside.

2007 Pre-Budget Report and Comprehensive Spending Review – October 2007

Combined PBR and CSR because of late publication.

No cross-cutting reviews.

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