Spending review

A Spending Review or occasionally Comprehensive Spending Review is a governmental process in the United Kingdom carried out by HM Treasury to set firm expenditure limits and, through public service agreements, define the key improvements that the public can expect from these resources.

Spending Reviews typically focus upon one or several aspects of public spending while Comprehensive Spending Reviews focus upon each government department's spending requirements from a zero base (i.e. without reference to past plans or, initially, current expenditure). The latter are named after the year in which they are announced – thus CSR07 (completed in October 2007) applies to financial years 2008–2011.

Other developed countries have similar review processes, e.g. Canada, New Zealand, The Netherlands,Italy, Ireland, and France. France conducted its first comprehensive spending review (called in French "la Revue Générale des Politiques Publiques") in 2008. The Netherlands have been carrying our spending reviews since 1981.

The UK's 2007 Comprehensive Spending Review included 3 significant changes. The first was that it represented the first test of the capacity of the Spending Review process to plan and deliver a discretionary fiscal consolidation in the UK. The previous 4 Spending Reviews took place during a period of steady public growth in the economy from 37% in 1999–00 to 42% by 2007–08. As both the UK’s then fiscal rules (the Golden rule and the sustainable investment rule) began to bite, the UK government desired to halve the real rate of growth in public spending from 4% per annum over the last decade to 2% per annum over the next three years – a 0.5% below than the trend rate of growth of the economy. A second noteworthy development in the 2007 CSR was a marked extension in the certainty that the UK system now provides to managers about their future budgets. Finally, CSR07 saw the UK’s public service 110 largely departmental-based Public Service Agreements consolidated into 30 inter-departmental agreements.

A spending review for the years 2011/12 through to 2014/15 was announced by the coalition government. This review was driven by a desire to reduce government spending in order to cut the budget deficit.

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