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Last Updated: Monday, 8 October 2007, 07:45 GMT 08:45 UK
What does the spending review have in store?
Alistair Darling
Alistair Darling's first spending review will set tougher targets
The Comprehensive Spending Review will set out the government's spending plans for the next three years and beyond.

Here's our guide to which areas of government can hope to throw a party, and which may need to go on a diet.

SPENDING LIMITS

Gordon Brown has said that education is his "passion" but health is his "priority".

Yet both the NHS and schools can expect a smaller spending increase than in previous reviews.

That is because the government's self-imposed rules on public spending impose a straitjacket on future increases.

Having risen from 37.4% of national income in 1999-2000, spending will level off at a little over 42%. The graph shows the changes in public spending since the 1960s.

Another graph

So who will do well from this Comprehensive Spending Review?

EDUCATION

We know for sure that schools will do better than average out of government spending increases, because the prime minister has already told us.

When he was chancellor, Gordon Brown said education spending in England would increase by 2.5% a year in real terms between 2007/8 and 2010/11.

HEALTH

Health has been the main beneficiary of previous Labour government spending reviews and the pie-chart shows that it currently gets the biggest share of the cake after pensions & welfare benefits.

Pie chart

The NHS is still expected to do better than most other areas of government from the review, but the slowdown in the growth of health spending begins here.

Since 2002 the service has experienced average annual real terms increases of more than 7%. This is expected to fall to between 3% and 3.5% in the years to 2011/12.

From such a high base, in the NHS this will feel like a tough spending round.

It is also in sharp contrast to the recommendations of the Wanless review published in 2002. It said that spending on the NHS should be boosted by 4.4% a year over the five years from 2007/08.

Elsewhere, the Institute for Fiscal Studies said the Home Office, the Ministry of Justice and nine other small departments will have to face a spending cut of 2.6% a year, when inflation is taken into account.

"Delivering these cuts without a detrimental impact on service quality in these areas will undoubtedly be difficult," said Carl Emmerson of the Institute for Fiscal Studies.

HOUSING

With many younger voters unable to get onto the housing ladder, housing has raced to the top of the political agenda.

In the housing green paper, the government pledged to help build at least 210,000 affordable homes through funding of housing associations.

The government has already said this will cost 8bn.

DEFENCE

The defence budget has shrunk in comparison with the rest of the economy since the 1980s.

British soldier in Basra
Defence spending will rise but at a lower rate than other services

That trend is unlikely to change in this review.

Expect defence expenditure to rise from 34bn in 2008-09, to 35.3bn in 2009-10 and 36.9bn in 2010-11.

This is a rise - but just 1.5% above inflation.



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