Senior figures say PM will struggle to get deal signed off in current political uncertainty
Theresa May’s waning authority means the idea of concluding a three-year spending review next year is a fantasy and is only likely to be achieved if she were replaced as leader, cabinet ministers have said.
The government has promised a full spending review in 2019 as part of a pledge to end austerity in the coming years, but senior figures say May will struggle to get the plan signed off.
The review has become the subject of speculation in Whitehall given the prime minister’s pledge to step down before the next election and the unpredictable state of the Brexit negotiations.
“The idea that the cabinet is going to accept a three-year spending review is fantasy,” one government source said. “Most of them won’t even do a three-minute broadcast clip at the moment. Departments are starting to get their houses in order for a one-year sticking plaster settlement.”
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Others are opposed to the idea of a one-year plan. They describe it as “kicking the can”, and believe May should instead consider quitting before the spending review to let a new leader set the direction of the party.
“She cannot be allowed to set those terms herself,” one cabinet minister said.
Another government source said a full spending review could be redundant within weeks, particularly if the UK left the EU without a deal, which could have a long-term and unpredictable economic impact.
The chancellor, Philip Hammond, confirmed plans for a full spending review in the budget. Areas hoping for a significant boost in spending from 2020 include defence, policing and social care.
Adate for the spending review has not yet been confirmed and is likely to be dependent on the outcome of the Brexit negotiations, but Hammond has said more detail will be set out in the spring.
The period of time covered by the review can be set at the government’s discretion but has sometimes been as long as five years. The last spending review in 2015 set funding allocation until 2020.
In her Conservative party conference speech this year, May suggested the spending review would need to be very different to its immediate predecessors. “People need to know that the austerity is over and that their hard work has paid off,” she said.
Despite her promise to Tory MPs that she would resign before 2022, Conservative party rules mean May’s victory in last week’s confidence vote makes her secure as leader for at least a year, creating fresh tensions at the heart of government.
Those seeking to succeed May as party leader would be likely to want to stamp their own mark on government spending plans ahead of the next general election.
A report from the Institute for Government had previously warned of the difficulties in setting a long-term spending review in 2019. Tess Kidney Bishop, one of the report’s authors, said a three-year spending review was preferable but could be impractical.
“In the event of a disorderly Brexit, the level of uncertainty would make setting allocations for three years ahead almost impossible. It might have to be a one-year spending review,” she said.
“But if the UK has entered a transition period, a three-year review is much more desirable. The spending review should be the time for the government to lay out its priorities for the country post-Brexit and show how public money will deliver these.
“A one-year review is just too short to bring about any big change in direction and will make it much harder for public services to plan. And it will mean another review in 2020, which will take up more time and energy for civil servants and politicians.”