The spending review is “unlikely” to take place this year, the chief secretary to the Treasury has admitted.
Giving evidence to the Lords economic affairs committee on Tuesday, Ms Truss blamed “goings on” within the Conservative Party for the anticipated delay, a reference to the ongoing Tory leadership contest which is not expected to conclude until late July.
As LGC reported last week, the resignation of Theresa May as prime minster had led to a growing expectation within local government that the spending review would be delayed.
Ms Truss said: “The plan was to launch the spending review just before the summer recess…I would suggest that’s unlikely given the current timetable of the Conservative leadership election. Although we will need to set revenue budgets [for 2020-21] we do already have capital budgets until 2021.”
A delay to the spending review is likely to mean plans to reform the way funding is distributed between councils under the fair funding review will also be put back. The Ministry for Housing, Communities & Local Government told LGC last week it would “publish further information [on the fair funding review] once the timing of the spending review is clear”.
Ms Truss was appearing before the committee to discuss the spending review and the government’s plans for capital investment.
Asked about whether the government would continue with HS2, she said that would be a decision for the next prime minister but that a zero based capital review meant the “entire” capital programme was up for consideration.
She said the Treasury was working on improving how it assessed the value of capital projects with a focus on their contribution to economic growth and improved productivity.
“I want to make sure we are assessing fibre and broadband on the same basis as road and rail,” she said.
Ms Truss was also asked about the pressures local government was under due to funding cuts.
She said: “We are looking at how do we make local government sustainable in the future. I think part of the answer to that is more devolution. One of the changes we have seen in the past nine years is we have moved from most of the money for local government coming from central grant to money being raised locally… We need to make sure local government has the power to do that.”