Spending Review (United Kingdom)

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A Spending Review or occasionally Comprehensive Spending Review is a governmental process in the United Kingdom carried out by HM Treasury to set firm and fixed three-year departmental expenditure limits and, through public service agreements, define the key improvements that the public can expect from these resources.

Spending Reviews typically focus upon one or several aspects of public spending while Comprehensive Spending Reviews focus upon each government department's spending requirements from a zero base (i.e. without reference to past plans or, initially, current expenditure). The latter are named after the year in which they are announced - thus CSR07 (completed in October 2007) applies to financial years 2008-2011.

The UK's 2007 Comprehensive Spending Review included three major innovations. The first new development was that it represented the first real test of the capacity of the Spending Review process to plan and deliver a discretionary fiscal consolidation in the UK. The previous four Spending Reviews took place within a context of an overall public expenditure envelope that was steadily growing as a share of the economy from 37% in 1999-00 to 42% by 2007-08. As both the UK’s fiscal rules (the Golden rule and the sustainable investment rule) began to bite, the UK needed to halve the real rate of growth in public spending from 4% per annum over the last decade to 2% per annum over the next tree years – a ½% below than the trend rate of growth of the economy. A second noteworthy development in the 2007 CSR was a marked extension in the length, breadth and depth of certainty that the UK system now provides to managers about their future budgets. Finally, CSR07 saw a major streamlining of the UK’s public service performance management regime in which 110 largely departmental-based Public Service Agreements were consolidated into 30 explicitly inter-departmental PSAs articulating the Government’s top priorities for the coming period.

Other developed countries have similar review processes, e.g. Canada, New Zealand, Italy, and France. France conducted its first comprehensive spending review (called in French "la Revue Générale des Politiques Publiques") in 2008.

[edit] External links

• HM Treasury: spending review
• The UK's 2007 Comprehensive Spending Review (CSR07)
• Implementing a 'Spending Review' -- Italy Seeks to Improve the Quality of Public Expenditure
• France: la Revue Générale des Politiques Publiques