Defence, police and schools will be forced to accept less

Budgets not expected to increase in line with inflation as Government ‘cannot meet all demands’

DEFENCE, schools and police budgets are likely to miss out on big spending increases because of Theresa May’s decision to pump £20billion into the National Health Service.

In recent weeks, both Gavin Williamson, the Defence Secretary, and Sajid Javid, the Home secretary, have signalled they want increases in their spending at the next spending review.

However, government figures have told The Daily Telegraph that the Prime Minister’s commitment to increase NHS spending by an average of 3.4 per cent from next March means that other key departments will have to settle for less.

One senior source said the next spending settlement – expected to cover the three years after 2020-21 – will see non-health budgets not increasing by inflation every year.

The spending review – which is expected to cover the years 2020-21, 2021-22 and 2022-23 – is set to be flat in cash terms, which meant that it would not allow budgets to increase annually by inflation.

The source said: “The argument is that we have made a big decision to invest in the NHS. That decision requires the Treasury to hold the line on other areas of spending that are under pressure, whether that is police, defence, education and others.

“That is a very difficult line to hold because in each of those areas there are lobby groups and various issues.

“The NHS consistently comes up as the number one issue. It polls very well. We have made a decision that we are not going to be able to satisfy all the demands.”

Another insider said the Treasury was likely to focus on spending cuts in departments outside health, education, defence and police, which they reckoned were also priorities for voters. In recent months, Cabinet minis- ters have been making their pitches for more money from the Treasury.

In January, Mr Williamson won his first major battle as Defence Secretary by heading off cuts to troop numbers. Instead a fresh defence review was ordered.

This gave Mr Williamson extra time to make a case for maintaining the fighting strength of the Army, Royal Navy and Royal Air Force.

There had been speculation that the review would decide to allocate more resources to intelligence and cyber security at the expense of members of the Armed Forces.

Mr Hammond, a former defence secretary, reportedly told Mrs May last year that the Army only needed 50,000 soldiers, 28,000 fewer than it currently has.

Last month Mr Javid pledged to fight the corner for police in his first major speech as Home Secretary. He told a policing conference that he knew that they felt “overburdened and not sufficiently rewarded”, telling them: “I am listening and I get it.”

Also last month, Damian Hinds, the Education Secretary, said he recognised the extent of funding pressures in England’s schools, saying “it is challenging for schools making the numbers add up”.

One government source said that other ministers would be very disappointed to learn that they might not benefit from a big spending increase in the same way as health.

The source said: “I think Philip Hammond will find there is [now] a great deal of expectation and demands across the board from education, defence and the Home Office.

“If MPS and colleagues have seen the taps being turned on – the Chancellor will get short shrift if they are now turned back off.

“Sajid will be pushing really hard for policing and Gavin will be on defence. A lot of departments will be hoping that this is a shift, and it is broader than just health.”