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banner Friday, 14 July, 2000, 18:53 GMT 19:53 UK
Promise keepers?
1998 spending targets - from the first comprehensive spending review
Gordon Brown's first set of spending targets, issued in 1998
When Gordon Brown announced his plans for a three-yearly Comprehensive Spending Review (CSR), he promised an end to the boom and bust of public finances. BBC News Online examines whether he has managed to keep his word.

The Comprehensive Spending Review was introduced to make public spending more predictable and transparent, by setting budget targets and limits for three years in advance.

Launched just two years ago, the Chancellor 's policy of long-term fiscal planning has not really been put to the test yet, which makes it difficult to evaluate whether is has had any real impact at all.


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
14 July 1998
It has not helped that Mr Brown tied his hands until 1999, pledging during the general election campaign to keep to the tight spending targets set by his Conservative predecessors.

And even under the new system, only half of all government expenditure is actually planned on a three-year basis.

Where are the targets?

The new spending system is based on performance reviews. Government departments have to provide targets to measure how well they have spent the money allocated to them.

Another priority is public sector investment. The Chancellor has bemoaned the low level of infrastructure investment during the Tory years and wants to boost them.

However, new roads, better rail links and improved public transport take a long time to plan and execute.

Recognising this, the CSR is to contain a 10-year plan for an "integrated transport policy", but Labour has yet to deliver the key data on where it wants to spend how much money.

Without them, government performance cannot be measured.

The Masters of Spin

In fact, there have been few targets in any areas which clearly show whether government money has been spent wisely.

In the first spending review, the government stressed its commitment to increased spending on health and education, promising 19bn more for education and 21bn for health.

These figures were widely criticised later for double-counting, with spin doctors adding up the increase each year three times to make the sums involved seem larger.

In reality, education spending will have increased by 9.6bn in 2001, plus an extra 1bn announced in the budget in March this year.

Despite the spin, the education budget is set to grow every year by 3.2% until 2002, double that of the last government.

As a percentage of UK gross domestic product, though, spending is actually falling, down from 5% under the Tories to 4.7%.

Health: crisis and boom

In health, the picture is somewhat different.

Government claims in 1998 to deliver "by far the largest sustained increase in NHS funding of any period in its 50-year history", have turned out to be correct.

Despite keeping to extremely tight targets set by the Tory government during the first two years, spending on the National Health Service (NHS) is set to raise by 19bn over four years.

This represents a real increase of 35%, or an annual increase of 6.1% from 2000 to 2004 - up from 3.1% achieved during the previous government, and 3.4% during the whole history of the NHS.

But while the Chancellor is set to keep his promise to increase spending, he is falling short in the predictability department.

Instead of keeping to his spending targets, he poured extra money into the system when a bed crisis triggered a lot of negative publicity for the government.

In the prudent Chancellor's book, this reads like a page from the chapter of the bad old boom-and-bust years.

Mr Brown is in luck, though. The UK avoided a recession in 1999 and the buoyant economy is channelling plenty of money into his coffers.

He can afford to be generous, at least for now.

It may even help his party to win a re-election.

And even though that should be part of a spending review, this is somewhat predictable as well.

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See also:

13 Jul 00 | Business
Big spender 'still prudent'
13 Jul 00 | UK Politics
Blair promises spending rise
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