Headlines: November 28th, 2001

The Pre-Budget Report published by the Chancellor of the Exchequer has set out how the Government aims to balance the world economic slowdown with promises of vigorous investment in public services.In addition to holding to previous spending plans, the Chancellor announced a further one billion-pound allocation of resources to the NHS.

In public service terms, the Chancellor’s most important comments were set aside for the NHS. Pre-empting a report he has commissioned on the long-term funding of the NHS, he gave the strongest hint yet that a revitalised NHS could only be achieved by further substantial investment, beyond that already promised, and paid for out of the public purse.

Former NatWest bank chief executive Derek Wanless has been commissioned to examine how much money the NHS will need long term. His interim report is expected to say that the NHS is seriously underfunded to cope with increased expectation and an ageing population, and that spending will have to continue to rise at an accelerated level.

Spending on public services in 2003-04 will be 50 billion pounds more than it was in 2000-01. 75% of this increase will be spent on health, education, transport, housing and law and order. Between 2000-01 and 2003-04, in real terms, education spending will grow by an average of 5.6% each year; health by 5.7% each year and transport spending will grow by 14% each year.

The pre-budget report also offered an extra 30 million pounds for Britain’s police forces. It announced a spending review to determine how departments can best deliver further improvements in public services and set new spending plans for 2004-05 and 2005-06.

Other measures in the report, Building a stronger, fairer Britain, include support for pensioners and families and measures to raise productivity. Subject to consultation, they will form the basis of the Chancellor’s Budget 2002.