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  • Minhaz Moosa

The 2020 Spending Review

Chancellor Rishi Sunak has set out what the UK government will spend on health, education, transport, and other public services over the next year in his latest spending review.


In his statement to parliament he outlined numerous points, briefing the MPs on the state of the UK economy and the latest forecasts for the public finances, which have been damaged by the pandemic.


In his speech he raised a few points, outlined here:


· It is estimated around 1.3 million public sector workers will have their pay frozen in 2021-22.


· Majority of NHS workers and those earning less than £24,000 will have a pay rise.


· The UK economy is expected to shrink by 11.3% this year.


· Unemployment is likely to reach 7.5% next Spring, with 2.6 million people out of work.


· The overseas aid budget is to be cut by about £4bn


· A new £4bn ‘’levelling up’’ fund will pay for upgrading the local infrastructure.


The points highlighted above have waged an expected debate from individuals across the country, many criticising Rishi Sunak on the frozen pay for public sector workers.

Some are calling it ‘offensive’ and/or ‘a lack of respect’ for key workers. However, they have stated that low-paid public sector workers (£24,000 or below) will get a minimum of a £250 increase.

A public sector pay freeze for all, but the NHS has been long trailed, and critics will inevitably contrast this with the lockdown applause for key workers. Sunak states this is an issue of fairness against the private sector.

With the UK economy set to contract by 11.3% in 2020 and the output not expected to return to precrisis level until Q4 of 2022, this has been the largest fall in 300 years. Although the government are attempting to help as many people as possible, it would be unreasonable to expect them to not have to cut costs in certain areas.

In regard to UK businesses, a new £4.6bn package will be introduced to help people back to work along with a variety of other schemes and funding to boost the UK employment and companies. Business rates multiplier will also be frozen from 2021-22.

According to Sunak, jobs are their ‘number one priority.’


If you need any help or advice navigating the latest guidance, regulations, funding, and schemes, please feel free to contact our team on 01254 781969 or info@intelligentpayroll.co.uk

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