Owen Mapley on stage at PF Live 2024. Image © Rafael Bastos
The government’s Spending Review offers a mixed bag for finance leaders across public services. There are the large scale and heavily trailed pivots towards increased defence spending and even greater NHS funding. There are also some welcome announcements, such as the major investment in affordable housing and a commitment to simplifying local government funding.
But several critical and concerning gaps remain, particularly in adult social care and special educational needs and disabilities.
One of the more interesting announcements is the renewed focus on community infrastructure, such as youth centres, parks, and libraries as part of the DCMS focus on a youth strategy.
And while no-one would say no to investment in town centres and other places that local communities value, providing these via specific central government grants raises questions. Why should only selected towns benefit from what should be a universal local government function? We don’t know yet whether these grants will be allocated through the rightly derided competitive bidding pots, or via distant decision-making by Whitehall.
But it’s impossible to ignore the fact that these projects are a mere drop in the ocean when set against the large-scale retrenchment local authorities have been forced to make from these sorts of valuable place-based services due to the continued and rising social care and other statutory service demands.
The spending review includes £555m for transforming children’s social care, with a focus on early intervention and expanding children’s homes and foster care. This is vital, especially given the broken independent placement market. Yet, it remains unclear whether this funding will help stabilise the overstretched social care workforce.
SEND reform is another area where massive concerns and uncertainties remain. A white paper is promised for the autumn, but with the system already in crisis this prolongs uncertainty for councils and families alike. Further details are promised in the consultation response to the local government funding reforms. But the lack of clarity on transitional arrangements following the end of the statutory override in March 2026 only adds to the anxiety.
Adult social care, for many people a hugely pressing issue, received only general commitments. Despite acknowledging its challenges, the Spending Review offers little beyond references to the distant Casey Review and its initial ambition to make better use of existing resources.
The claimed £4bn increase in funding also relies on increases provided from growing NHS budgets and the Better Care Fund. But with so many managers tied up in Integrated Care Board restructures, the abolition of NHS England and local government reform, good luck to all those trying to navigate BCF negotiations.
On local government funding, the headline figure of £3.4bn extra per year by the end of the review period is tempered by the fine print: councils will need to continue raising council tax by 5% annually to realise this increase. This continues what we have seen for many years now with the burden of unconstrained demand being felt by local residents through an antiquated and regressive council tax.
In summary, while the Spending Review contains many positive steps and welcome investments, there are still large numbers of unanswered questions and concerns. More will come in subsequent white papers and consultation responses, but it will continue to be a worrying time for many public services and their finance leaders.
