Q&A: Comprehensive Spending Review

The review will say how much is to be spent on the NHS

The 2007 Comprehensive Spending Review is a complete reassessment of the government's spending priorities.

Here's our guide to what the Comprehensive Spending Review means for different government departments and for you.

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What is a Spending Review?

It is the government's main tool for deciding how much money will go into schools, hospitals and other public services.

When he was chancellor, Gordon Brown decided to take a long term view and make these decisions every two to three years.

The first innovation of the Comprehensive Spending Review is to move from the short-termism of the annual cycle and to draw up public expenditure plans not on a one year basis but on a three year basis. Gordon Brown, 1998

Previously public spending had been planned for a year ahead, and announced in the annual Budget.

The new Chancellor Alistair Darling will set out the government's spending plans for the next three years: 2008/9, 2009/10, 2010/11.

How does it work exactly?

The Treasury sets the overall limit for public spending. It then allocates resources between departments, according to the government's priorities. The NHS did particularly well in the 2004 spending review

These budgets are known as Departmental Expenditure Limits (DELs). It is then up to departments to decide how best to manage and distribute this spending within their own areas.

Some spending cannot be fixed in this way. Social security benefits, for example, can vary dramatically and are therefore managed in the Budget and the pre-Budget Report.

But this is a "Comprehensive" Spending Review. Does that make it different?

Yes, the Comprehensive Spending Review could set the government's strategy for the next decade. In 1998, the last CSR said that health and education were to be priorities and they have received more money ever since.

Future spending reviews were then used to outline the details of this strategy.

The Treasury has said that this year's review will carefully consider the impact of a number of long-term issues, among them:

• population change
• technological change
• tackling terrorism
• pressure on natural resources such as oil,

Comprehensive Spending Reviews also work from a zero base. This means that that they ignore past spending plans and start from zero.

This could mean radical changes, with less money for low-priority departments.