Budget Ringfences Preventative Spending From Raids
Spending judged to be "preventative" will be ringfenced from now on, under a measure tucked into John Healey's budget. It got the briefest of mentions in his speech and one paragraph in the 166-page budget document.
The rule covers any spending where the initial outlay will be more than made up for by future savings. Such money will not be available to plug more immediate gaps. The change starts with the spending review that begins next year. Qualifying projects will sit under a new category, a preventative departmental expenditure limit, or PDEL.
Years of raiding long-term budgets
Long-term spending has often been used to fill day-to-day gaps, particularly during and after the austerity of the 2010 coalition government. That period saw many prevention-based services cut, not least the Sure Start programme for families with young children.
The budget document gives Andy Burnham's new spending to prevent rough sleeping as an example of what would qualify. Public health programmes and Sure Start-type early years schemes also look likely. Officials describe the decision as part of a wider push under Burnham to tackle neglected issues with long-term costs, including rough sleeping and adult social care.
"It could end up being quite a major change in how the government runs spending reviews, and the entire spending framework," said Stuart Hoddinott of the Institute for Government thinktank, which had called for such a system. A Treasury official called it an "important reform".
Unanswered questions
Treasury guidance has not yet been drawn up, and departments say they are waiting for it. "A lot depends on the definition," Hoddinott said. "While it sounds simple, it becomes quite difficult when you think about how it will work in practice, as you could make any argument that almost all types of spending are preventative."
One government official noted that, in theory, the Ministry of Defence could argue all its spending is preventive, given the costs of fighting a war. That raises the prospect of a new variant of the spending-review tussles between departments and the Treasury.
Some other governments protect specific preventative budgets, such as public health. This is believed to be the first time one has introduced the idea as a blanket policy.
Greg Fell, Sheffield city council's director of public health and president of the Association of Directors of Public Health, welcomed it. "This does feel like a really good thing," he said. He added that there are many questions about how it will work and that some benefits might take decades to appear.
Source: the Guardian