As has become increasingly the custom, around two thirds of the Chancellor’s pledges and commitments on spending were telegraphed well in advance of today’s Spending Review announcement. We knew, for example, from the March budget that he intended to increase overall Departmental expenditure by around 4% above inflation (in fact it will increase by 3.8% this year). We also knew that this would be a single-year commitment, rather than the usual 3-4 year Spending Round.

But the 2020 Spending Review (‘SR20’) still had some interesting surprises up its sleeve. As always, the devil will be in the detail - short-term relief for cash-strapped Councils may help keep the wolf from the door, but it is clear that the real cost to the taxpayer and businesses isn’t far behind, with predictable consequences for publicly-funded library services.

Balancing the books

First the sobering projections on the contraction of the UK economy in 2020 due to COVID. The Chancellor warned that the “economic emergency” in the wake of the pandemic has only just begun, with a forecast 2.6m people unemployed by mid-2021 (up from 1.62m today) and an estimated 11.3% fall in economic output. Certainly, we have already begun to see the impact of this for librarians and information professionals – CILIP is already engaged in supporting a number of our members who have been put at risk of redundancy and we will be launching a new platform and support resources shortly to handle what we anticipate will be increased demand in 2021.

The question was less how dire the prognostications of the Office of Budget Responsibility (OBR) looked, but how ‘generous’ the Chancellor hopes to be despite them.

The first two measures announced today will be hard to swallow – the decision to cut Foreign Aid from 0.7% of GDP to 0.5% runs counter to the commitments the Government was making on this front as recently as March (and as a main pillar of Conservative modernisation since 2010).

Harder still – the decision to go ahead with a public-sector pay freeze (exempting NHS workers and people earning less than £24,000) will impact on millions of exactly those public sector workers that have worked incredibly hard to get the Nation through COVID, to keep services running and help maintain people’s quality of life. The pay freeze is likely to affect library and information workers across the public sector, representing a real-terms cut in salary during 2021. While the Chancellor was keen to point out that the Spending Review signals ‘no return to austerity’, it is certainly going to feel like it for many in our profession.

The UK Government employs an estimated 5.4m people with a wage bill of £204bn, so it is easy to see that this is a significant fiscal decision. However, when set in the context of a proposed increase in public borrowing of £394bn, it is hard to see how a complete freeze is justifiable.

Also absent from this Spending Review was any real statement on tax. It’s not unusual (in recent history) for this to be the case, but it does mean that while borrowing is spiralling, the Government is deferring the moment where it needs to lay out exactly how this borrowing will be paid down, and by whom.

Levelling out, not levelling up

Other measures are likely to be more welcome. The Chancellor made good on his commitment to invest in infrastructure in 2021, with a commitment of £100bn to drive capital spending on infrastructure next year and the introduction of a £4bn ‘Levelling Up’ fund, which explicitly cited libraries as a potential recipient. There is some relief to be had for librarians and knowledge specialists in health. As well as being exempted from the pay freeze (assuming that they will be), there is a hope that some of the £3bn earmarked for Coronavirus response in the NHS will go towards the creation of much-needed additional capacity.

The problem the Chancellor has is that if these commitments were made against a backdrop of healthy services and the equal distribution of investment across towns, cities and rural communities across the UK, they could represent a real investment to unlock the kind of creativity, innovation and growth he envisages.

But they’re not. They come on the back of 10 years of punishing and inconsistent austerity, which has run services ragged and placed unreasonable demands on the public sector workers on whom much of our national infrastructure depends.

A £6.3bn cash increase to the NHS would be very positive if it didn’t come after a decade of the NHS signalling a £20bn funding shortfall.

A £2.2bn investment in Schools would be more welcome if it weren’t for the £5.7bn funding shortfall highlighted by Head Teachers in March last year, despite the commitment to rebuild 500 schools (which without meaningful standards may continue not to have a school library).

The proposed £4.4bn Levelling Up fund would perhaps have a great impact if it weren’t for the £7.4bn funding shortfall for Councils highlighted by the Local Government Association in July 2020.

Unfortunately, today’s Conservative Government can’t just write off the impact of austerity. As a result, this isn’t a budget for levelling up so much as levelling off the deep scars inflicted by George Osborne’s 2010 austerity budget. How effective it is in doing this really depends on how good the Government is at directing the funds where they are most needed.

Short-term measures, long-term needs

This Government (like others before it) seems to be in thrall to the ‘Big Fund’ approach to policy. In SR20, it is the ‘Levelling Up’ fund, which will provide opportunities for civic institutions including public libraries to do good projects which showcase what they’re capable of.

But while it plays better in the press, the ‘Big Fund’ is a short-term measure in a world crying out for long-term answers. What we really need is a Government that takes a long-term view on creating the conditions for people to flourish and prosper, which requires long-term fiscal policy and careful administration. It means taking tax-and-spend seriously, not as an endless programme of initiatives, but as a skilled alignment of taxation, need, demographics and the cost of provision.

Brexit, what brexit?

Marked by its near-total absence from today’s announcements was the recognition of the likely economic shock of the end of the transition period and the continued risk of the UK’s departure from the European Union with what is euphemistically being descried as a ‘shallow deal’.

In this context, the slightly optimistic view of our ‘bounce back’ (5.5% in 2021 and 6.6% in 2022) looks more optimistic still. There is a risk that with borrowing at a peacetime high and a very significant chunk of spend committed to infrastructure, the UK finds itself exposed if further fiscal stimulus is needed to offset the impact on brexit on the economy and key sectors such as financial, legal and professional services.

The detail is still very light on the design and operation of the UK Shared Prosperity Fund – the new instrument designed to replace lost funding from EU Structural Funds in the UK regions. There is an excellent background briefing on the UKSPF from the House of Commons Library.

The question for many in Higher Education will be whether these funds can be used to offset the loss of access to European funding for research and innovation. Brexit has already had a very significant impact on Universities, and by association librarians and information professionals in HE. Without clear recognition of the need to support future innovation through HE, Universities will continue to face severe financial pressure.

Devolution, what devolution?

Equally notable by its very muted treatment in the Spending Review statement was a recognition of the very significant financial challenges faced in Scotland, Wales and Northern Ireland in light of recent funding settlements.

The Spending Review is not the main event on Devolution – it will be the decisions between March and April 2021 which define the block grant to be made available under the Devolution settlements and this in turn will define how much the Governments have to spend in the Devolved Nations.

The Chancellor did signal real-terms allocations under the Barnett formula (£2.4bn to the Scottish Government, £1.3bn to the Welsh Government and £0.9bn to the Northern Ireland Executive. However, we won’t know the specifics on how these budgets will be allocated – and therefore the implications for library and information services in the Devolved Nations - until next year.

A longer-term view on infrastructure

In the context of a global pandemic, it is perhaps more understandable than usual for a Chancellor to want to take a 1-year view. There are many variables about 2021 that remain unknowable. But what is markedly absent from this Spending Review is the underlying long-term vision of the kind of industrial economy the Chancellor and Downing Street want to create. The closest we got was this, near the end of Rishi Sunak’s presentation:

"The spending announced today is secondary to the courage, wisdom, kindness and creativity it unleashes. These are the incalculable but essential parts of our future, and they cannot be mandated or distributed by government. These things must come from each of us, and be shared freely, because the future, this better country, is a common endeavour."

The less visible, but no less significant, part of this was actually the National Infrastructure Strategy that has been simmering for quite some time and which was presented alongside today’s Spending Review announcements.

The National Infrastructure Strategy puts more meat onto the bones of the ‘levelling-up’ agenda, with a welcome commitment to the Green Agenda and a fairly traditional view that ‘more physical infrastructure will deliver more growth’ – a proposition that has to be examined further in light of the great digital pivot of 2020.

Conclusions

In all, you can see what the Chancellor is trying to do, but there is a real sense that this Government will struggle to move forward until it acknowledges and makes good on the damage wrought by austerity. This is not a level playing field. Our public services are not healthy and robust. Our infrastructure is not ready. Economic inequality is still growing, as is the number of ‘left behind’ communities.

We need to mend the sails and caulk the hulls before we can set off on Rishi’s grand new adventure.

While much here is welcome, and the wheels are already in motion to ensure that publicly-funded libraries (such as public libraries, schools and prison libraries) get a fair share of the investment funding that is being made available, we must now apply ourselves with determined effort to ensure that the next Spending Review marks a genuine turning-point in the recognition of the potential of our sector to help communities everywhere level up, not just for the short term, but long after 2020 is a distant memory.