Full spending review ‘unlikely’ in time for 2020-21

Giving evidence to the Lords economic affairs committee on Tuesday, Ms Truss blamed “goings on” within the Conservative Party for the anticipated delay, a reference to the ongoing Tory leadership contest which is not expected to conclude until late July, Local Government Chronicle has reported.

The resignation of Theresa May as prime minster had led to a growing expectation that the spending review would be delayed.

Ms Truss said: “The plan was to launch the spending review just before the summer recess…I would suggest that’s unlikely given the current timetable of the Conservative leadership election. Although we will need to set revenue budgets [for 2020-21] we do already have capital budgets until 2021.”

It leaves it unclear when various health budgets will be set, and for what period.

It comes with the Department of Health and Social Care, and NHS England, having indicated NHS capital and education and training budgets could receive multi-year funding boosts under the spending review this year. Both have seen real terms cuts in recent years and the NHS has indicated they need more funding in order to deliver its plans.

When the government announced its five-year spending settlement last year, it said it would also “consider proposals from the NHS for a multi-year capital plan to support transformation and a multi-year funding plan for clinical training places”. It also said it would “come forward with proposals to reform social care later this year” – a deadline now long missed – and “ensure that adult social care doesn’t impose additional pressure on the NHS”.

Ms Truss was appearing before the committee to discuss the spending review and the government’s plans for capital investment.

Asked about whether the government would continue with HS2, she said that would be a decision for the next prime minister but that a zero based capital review meant the “entire” capital programme was up for consideration.

Ms Truss was also asked about the pressures local government was under due to funding cuts.

She said: “We are looking at how do we make local government sustainable in the future. I think part of the answer to that is more devolution. One of the changes we have seen in the past nine years is we have moved from most of the money for local government coming from central grant to money being raised locally… We need to make sure local government has the power to do that.”