News

The Chancellor this week promised to increase annual spending on public services by £61bn by 2005/6 – but insisted that the new resources must be matched with reform and results, writes Lauren Revans.

Announcing the outcome of the government’s third Comprehensive Spending Review, Brown unveiled a £1.5bn combined budget for childcare, early years education and Sure Start by 2005/6 to be managed by a new inter-departmental unit.

The extra funding will ensure the creation of at least 250,000 extra childcare places, and an expansion of Sure Start to 400,000 young children, including 50 programmes in rural areas and small pockets of deprivation.

It will also fund the creation and operation of children’s centres, enabling an additional 300,000 children in disadvantaged areas to access health, social care, education and other services alongside some of the new childcare places.

The voluntary sector was another beneficiary of Brown’s spending spree. The Chancellor announced the creation of a new investment fund worth £125m over the next three years to help overcome barriers to effective service delivery, increase the scope and scale of voluntary sector services, and modernise the sector. The money comes on top of the £188m already promised to the Home Office’s Active Community Unit over the next three years.

Resources were also allocated to the neighbourhood renewal fund, which will rise from £300m this year to £525m in 2005/6. In addition, budgets for England’s nine regional development agencies will rise from £1.6bn this year to £2bn in 2005/6 to boost work on driving forward economic development and regeneration in the regions.

Reward grants worth a total of up to £635m over three years for authorities who achieve stretch targets set out through local public services agreements will also be made available.

The Home Office budget will rise from £10.7bn this year to £13.5bm in 2005/6, with some going towards speeding up reforms to the asylum system and to tackling crime and its causes.

But it was education that received the biggest boost this week: a real terms increase of 6 per cent per year for the next three years. Within that, income-related education maintenance allowances worth up to £1,500 per year will be available to all 16 to 19 year olds from lower income families from September 2004. Money will also be invested in tackling poor pupil behaviour.

But there are strings attached to all this new cash. The Chancellor countered his generosity with an emphasis on inspections and targets, including a new round of departmental Public Service Agreements and the creation of the new health and social care inspectorates, a single housing inspectorate, and a reformed criminal justice system inspection regime.

Health secretary Alan Milburn will "shortly" be making an announcement on how the extra resources for social services will be spent. However, the new PSA signed by Milburn suggests that he will need to devote at least some of it to mental health services for both adults and children, home care services for older people, drug treatment services, and services for looked after children and care leavers.