Departmental And Devolved Spending Is Getting Squeezed

23rd November 2023

One of the main unspoken bits of the forecast has been the slow and prolonged squeeze on departmental and devolved spending pencilled in by the Chancellor. Of course, the Spending Review period ends next year and settlements aren't yet determined, but the Treasury does tell the OBR what they should use as a holding assumption.

Spending on public services across departments and the devolved administrations is not expected to keep pace with GDP - which the OBR usually view as a neutral assumption - and instead is projected to fall across the forecast horizon relative to GDP. By 2028-29, resource and capital spending are forecast to be 0.6 and 0.5 per cent of GDP lower than in 2023-24, respectively, putting further pressure on frontline delivery.

Source
https://fraserofallander.org/autumn-statement-reaction-a-tax-cutting-statement-that-continues-to-raise-taxes-amid-slowing-growth-and-what-does-this-mean-for-scotland/