The main headlines of the Spending Review 2020- 2021
This afternoon Rishi Sunak delivered his spend review. This is an announcement about how and where public funds were going to be spent in the future.
Opening with the priority of protecting peoples lives and livelihoods, £55b has been allocated to tackling the virus outbreak next year. Our health emergency is not yet over, and the economic emergency has only just begun. Forget black Friday, this felt like it could be a very bleak Wednesday.
However, as the announcement continued, the news of stronger public services and a once-in-a-generation investment in infrastructure was welcomed with a positive response, creating jobs and growing the economy.
We have put together a few of the highlights we think are most relevant to our clients below, but for more information on some of the multi-year plans set out please visit the .Gov website.
Building it back up
The spending review announced the next phase of the government’s infrastructure revolution with £100b of capital expenditure next year, to kickstart growth and support hundreds of thousands of jobs.
The Chancellor also set out plans to further the levelling up agenda by launching a new £4b Levelling Up Fund that will invest in local infrastructure that has a visible impact on people and their communities and will support economic recovery.
How this will be delivered is yet to be announced but more details are expected to follow in coming weeks.
National Living Wage
To help people with their finances after a tough year, the Chancellor also announced an increase in the National Living Wage, by 2.2% to £8.91 an hour from April 2021.
This is likely to benefit around two million of the lowest paid.
Alongside that, public sector workers who earn below the median wage of £24,000 will be guaranteed a pay rise of at least £250
This could be a huge impact on a business with a large workforce so please contact us if you would like us to do some forward planning to establish expenditure when the new rates come into effect.
Business Rates
To help millions of businesses who occupy premises the business rates multiplier will be frozen in 2021-22, saving businesses in England £575m over the next five years.
The business rates multiplier is where the government multiply the rateable value of your premises by a number to achieve the amount you will have to pay in business rates. This multiplying number is what has been frozen.
Research and Development
The chancellor promised significant increases in Research and Development (R&D) funding totaling almost £15b in 2021-2022 in a bid to support the delivery of new drugs, treatments, and vaccines.
Research and Development carried out in other sectors is still available.
If you think you could be eligible, please contact us and we can assist you with making your claim.
Whilst it was not quite the budget, we are on the edge of our seats waiting for, today’s announcement did deliver some good news for businesses and individuals.
It promises money for huge future projects but at an expense of large borrowings on the country.
As ever, we will keep you up to date with any changes.
If you have any questions on today’s spending review please call us on 01482 888820