Rishi Sunak will use the occasion on October 27 to announce the conclusions of the 2021 Spending Review.
The three-year review will set UK Government departments’ resource and capital budgets for 2022-23 to 2024-25 and the devolved administrations’ block grants for the same period.
Announcing the start of the Spending Review, Chancellor Rishi Sunak said: “Since the start of the pandemic, we’ve delivered on an unprecedented scale to protect people’s jobs and livelihoods.
“Despite the worst economic recession in 300 years, we have not only got people back into work through the Plan for Jobs but continued to deliver on the priorities of the British people.
“At the Spending Review later this year, I will set out how we will continue to invest in public services and drive growth while keeping the public finances on a sustainable path.”
It comes as Institute for Fiscal Studies director Paul Johnson said that the UK was facing “the biggest tax rising year in many decades” after the Prime Minister announced tax changes on Tuesday to raise £12 billion for social care.
“This is £12 billion on top of £25 billion of tax rises in the Budget – this must be the biggest tax rising year in many decades,” he told BBC Radio 4’s World At One programme.
The Treasury said core departmental spending would grow “in real terms at nearly 4% per year on average” over the current Parliament.
By 2024-25, officials said that would mean spending will be £140 billion more per year in cash terms than in 2019.
But, following record public borrowing to deal with the coronavirus pandemic, departments are being asked to identify at least 5% savings and efficiencies from their day-to-day budgets as part of the Spending Review in order to be “reinvested” into Government priorities.
The department said the Spending Review would focus on investing in public services, on delivering Boris Johnson’s so-called levelling-up agenda, the transition to a “net zero” economy and “seizing the opportunities” of Brexit.