The chancellor has confirmed there will only be a one-year Spending Review this November, with funding commitments focused on COVID recovery, infrastructure, schools and the NHS.
Treasury officials said the spending review would fully fund 'priority infrastructure projects' and support the 'Build Back Better' agenda, as well as providing 'multi-year NHS and schools’ resource settlements.
HS2 and hospital building were given as examples of the kind of capital projects which require multi-year capital allocations.
Chancellor Rishi Sunak said 'In the current environment it's essential that we provide certainty. So we’ll be doing that for departments and all of the nations of the United Kingdom by setting budgets for next year, with a total focus on tackling COVID and delivering our Plan for Jobs.
'Long-term investment in our country’s future is the right thing to do, especially in areas which are the cornerstone of our society like the NHS, schools and infrastructure. We’ll make sure these areas crucial to our economic recovery have their budgets set for further years so they can plan and help us Build Back Better.'
Officials added: 'The Spending Review will confirm multi-year capital spending for key programmes where certainty is needed to ensure no time is lost in delivery.'
Local highways departments will be hoping this includes the Department for Transport's capital funding for roads to support asset management.
However without a similar five-year settlement for revenue funding, which broadly comes under the communities department MHCLG, it will still be difficult to plan for the future.
'While the government would have liked to outline plans for the rest of this Parliament, the right thing today is to focus entirely on the response to Covid-19 and supporting jobs - that’s what the public would expect,' Treasury officials said.
The Spending Review will focus on three areas:
- Providing departments 'with the certainty they need to tackle COVID-19' and deliver the Plan for Jobs to support employment;
- Giving 'vital public services enhanced support to continue to fight against the virus alongside delivering first class frontline services'
- Investing in infrastructure to deliver plans to unite and level up the country, drive economic recovery and Build Back Better.
The news comes as local highway departments face a funding cliff edge and have been left unable to plan for mid to long-term asset management in line with best practice.
In December 2014, the Government announced that £6bn was being made available between 2015/16 and 2020/21 for local highways maintenance capital funding, though this was supplemented by extra 'pothole cash' of more than half a billion pounds.
This five-year indicative funding settlement helped authorities plan maintenance regimes and stem the decline of the local network.
Chair of the ADEPT engineering board, Mark Stevens, said that in the summer that there was concern the local sector could fall back to previous patterns of funding 'famines' rather than five-year programmes.
'We have not received notice of funding for 2021-2022 yet and currently we are facing a cliff edge. I have suggested we could have five-year rolling programmes if not the annual allocations. We have not been told our annual allocations past 2020-2021.'
Adding to the concern is the recent ALARM survey figures, which showed the local roads maintenance backlog in England and Wales has increased by 14% to £11.14bn' demonstrating that 'the funding is not enough, it needs to be doubled,' Mr Stevens said.
It also looks highly unlikely the public sector will receive anything but a minimum pay increase.
The Government made a point of noting that it 'must exercise restraint in future public sector pay awards, ensuring that across this year and the spending review period, public sector pay levels retain parity with the private sector'.
The precise date for the Spending Review will be confirmed shortly but it will be in the last weeks of November.