On Wednesday afternoon, the Chancellor made his Spending Review announcement, setting out the government’s public spending plans for the new financial year ahead.
“It was quite a reserved announcement”, commented Alan McCann from DTE Tax Consultancy. “Concise and informative, most of the announcements are meant to be for the short to medium term, which is understandable considering the current ever-changing landscape.”
Quoting that the UK economy will shrink by 11.3% this year as well as government borrowing reaching almost £400bn, the Chancellor then went on to announce a series of support packages to save jobs and businesses.
Specific amounts set aside include:
> For vaccines: £18bn
> For public services (including support for the NHS to recover from the pandemic): £3bn
> For public transport: £2bn
> For local councils: £2bn
Apart from the above, reference was also made to the Unemployment Restart Programme. Under this programme, people who have been out of work for 12 months will be provided with regular intensive support tailored to their circumstances. The scheme will start next year and will be aimed at older workers.
There will be a pay freeze applicable for most in the public sector, except for approximately a million doctors, nurses and others in the NHS who will get a pay rise, as well as around 2.1 million public sector workers with earnings below £24,000pa, who will be guaranteed a minimum pay rise of £250 next year.
Potential direct impacts on SMEs
Among the various announcements, some stood out as being potentially impactful for SMEs in a more direct way:
> Increase in the National Living Wage to £8.91 per hour – This in turn may raise operation costs for certain businesses
> Levelling Up Fund amounting to £4bn for local projects This is a welcomed move which means businesses in relevant sectors will be able to tender for work linked to approved projects in due course.
> Greater investment in medical equipment, social care and schools – This may also have the impact of creating opportunities for SMEs across a number of busines sectors.
If you have any questions about the summary of this Spending Review announcement above and how it may affect your business, please do get in touch with your usual contact at DTE, or email us at marketing@dtegroup.com and we will get back to you as soon as possible.
*This article was originally posted on DTE website: https://www.dtegroup.com/news/covid-19-business-support-hub/a-summary-of-the-chancellors-spending-review-november-2020/
