2015 Spending Review

2015 Spending Review
Name	2015 Spending Review
Year	2015
Country	United Kingdom
Date	November 2015
Chancellor	George Osborne
Replaced by	2016 Budget

2015 Spending Review

The 2015 Spending Review was a United Kingdom fiscal planning exercise conducted in November 2015 that set departmental expenditure limits and capital allocations for the 2016–2020 period. It was led by Chancellor George Osborne in the aftermath of the 2015 United Kingdom general election and occurred alongside announcements affecting Her Majesty's Treasury, Department for Work and Pensions, Department of Health and Social Care and other major ministries. The review interfaced with policy frameworks associated with the Office for Budget Responsibility, the International Monetary Fund, the European Union fiscal rules and the legacy of the 2010 Spending Review.

Background

The review followed the 2015 United Kingdom general election, where the Conservative Party formed a majority administration under David Cameron, succeeding fiscal settlements from the Cameron–Clegg coalition era involving George Osborne and Nick Clegg. Preparatory work involved submissions from departments including the Home Office, the Ministry of Defence, the Department for Education, the Department for Business, Innovation and Skills and the Foreign and Commonwealth Office. The review built on analyses by the Office for Budget Responsibility and drew comparisons with previous fiscal events such as the 2010 election Spending Review and the 2013 Comprehensive Spending Review. It took place within a global context featuring commentary from the International Monetary Fund, the Organisation for Economic Co-operation and Development, and market observers in London.

Objectives and Fiscal Context

Key stated objectives aligned with the Conservative manifesto commitments, including deficit reduction targets set in coordination with the Office for Budget Responsibility and commitments to public service reform promoted by David Cameron and George Osborne. The review aimed to meet fiscal rules similar to those advocated by the European Union fiscal compact and to respond to macroeconomic indicators from the Bank of England, the Office for National Statistics and global bodies like the International Monetary Fund. Objectives included rebalancing spending across departments such as the Department for Education, the National Health Service, and the Ministry of Defence, while maintaining investment in infrastructure projects linked to bodies like High Speed 2 and local authorities represented by the Local Government Association.

Key Announcements and Departmental Allocations

The review announced departmental expenditure limits and capital budgets, with notable allocations affecting the NHS, the Department for Education, the Ministry of Defence, the Department for Work and Pensions, and the Home Office. The Department of Health and Social Care received commitments tied to funding settlements debated with organizations such as the British Medical Association and the National Institute for Health and Care Excellence. Defence spending commitments intersected with procurement programmes involving the Royal Navy, the British Army, and the Royal Air Force, and procurement suppliers like BAE Systems were focal points. Education allocations impacted institutions from the University of Oxford and the University of Cambridge to further education colleges overseen by the Education Funding Agency. Investment pledges for infrastructure and housing involved agencies such as the Homes and Communities Agency and projects like Crossrail. Welfare-related decisions affected entitlements administered by the Department for Work and Pensions and interacted with legislation including the Welfare Reform Act 2012.

Impact on Public Services and Welfare

Reactions within service sectors—represented by unions like the Trades Union Congress, the Royal College of Nursing and the NASUWT—focused on funding trajectories for the NHS, schools, policing by Police Service of England and Wales forces, and social care linked to local authorities such as Manchester City Council and Birmingham City Council. Welfare reforms intersected with claimant pathways managed by the Department for Work and Pensions and stimulated debate in the House of Commons and the House of Lords. The settlements influenced delivery by agencies like Public Health England and regulatory bodies including the Care Quality Commission, while advocates including Age UK and Citizens Advice raised concerns about impacts on vulnerable groups.

Economic and Political Reactions

Economic commentary came from the Bank of England, the Institute for Fiscal Studies, the Resolution Foundation, and the Office for Budget Responsibility, each assessing impacts on growth, inflation and public debt. Political responses spanned the Labour Party (UK), the Liberal Democrats (UK), and the Scottish National Party, with frontbench figures such as Jeremy Corbyn, Tim Farron and Nicola Sturgeon critiquing or supporting elements. Media outlets including the BBC, The Guardian, The Times (London), and Financial Times provided analysis, while business groups such as the Confederation of British Industry and the Federation of Small Businesses commented on implications for investment and public procurement.

Implementation and Subsequent Reviews

Implementation required departmental planning within frameworks overseen by Her Majesty's Treasury and the Cabinet Office and was monitored by the National Audit Office and the Public Accounts Committee. Subsequent fiscal events, notably the 2016 Budget and the fiscal adjustments following the Brexit referendum, prompted reassessments of allocations and policy priorities. Later reviews and fiscal statements from successive Chancellors including Philip Hammond and Rishi Sunak further modified commitments announced during the review, with ongoing scrutiny from bodies like the Institute for Government and the Institute for Fiscal Studies.

Category:United Kingdom public finance