FINANCE

Council tax hikes will do the heavy lifting

Surprisingly, local government wasn’t at the end of the queue for the chancellor’s cash – or at the front – but it is the upcoming consultation on funding reform that will really matter, says Kate Ogden.

© fandijki / Shutterstock

Setting aside the dizzying range of place names dropped in the speech, the recent Spending Review was a must-see event for the UK's public sector. The chancellor has now divvied up the spending pie between different services for the next three years, the clearest illustration yet of where the Government's priorities lie.

This wasn't the spending and investment bonanza that the speech, its supporters and detractors, all seem to want to suggest. Instead after increasing by 3.4% above-inflation over the last two years, total departmental spending is set to grow much more slowly (1.5%) over the next three. This has allowed Rachel Reeves to preserve a wafer-thin margin against her ‘ironclad' fiscal rules but made for starker trade-offs.

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