Spending review: Sajid Javid to announce £2bn in new Brexit funding for government departments

Chancellor’s statement expected to be billed as end to era of austerity

Mr Javid has said there will be no ‘blank cheque’ for departments (Getty)

Chancellor Sajid Javid will announce an additional £2bn of Brexit funding for government departments when he sets out public spending and investment plans on Wednesday.

Mr Javid will use the 12-month spending round to confirm that £2bn of Brexit money provided in 2019/20 will continue into 2020/21 - to be spent on projects linked to Brexit delivery after the UK leaves the EU.

It will include funding for the Home Office to support Border Force capability and money for the Department for Business, Energy and Industrial Strategy to explore developing the UK's own global navigation satellite system.

The announcement brings the total spent on planning for and delivering Brexit since the 2016 referendum to more than £8.3 billion.

Mr Javid said: “One of my first acts as Chancellor was to announce £2.1bn additional funding to prepare to leave the EU. We've now provided £8.3bn to help departments prepare for Brexit.

“This new funding will ensure that departments can grasp the opportunities created by Brexit after we leave on 31 October.”

Meanwhile, Labour has issued a challenge to Mr Javid to rule out tax cuts and deregulation for the finance sector in his first spending review on Wednesday.

Mr Javid is expected to signal an end to the era of austerity in his statement to the Commons, with big spending packages already announced for schools, police and the NHS.

But the shadow chancellor, John McDonnell, said he should also take the opportunity to tell bankers that any loosening of purse-strings did not mean they could “get their noses in the trough”.

The spending round statement will set out overall budgets for Whitehall departments for the single year 2020-21, rather than the usual two or three years, because of uncertainty over the impact of Brexit. A full multi-year review is planned for 2020.

The weeks since Boris Johnson took over as prime minister have seen a succession of spending promises, including:

– 20,000 new police officers;

– additional money for schools totalling £14bn over the next three years;

– £400m for further education;

– £1.8bn to upgrade 20 hospitals.

But Mr Javid has said there will be no “blank cheque” for departments and the Treasury says this spending round will take place under the previous government’s fiscal rules, which targeted a 2 per cent deficit in 2020-21.

Mr McDonnell said it appeared the finance sector had been lobbying the chancellor for handouts.

The shadow chancellor said: “I am staggered that the bankers are lobbying Javid for tax cuts and deregulation.

“Obviously with Johnson as prime minister they know they have a friend willing to line their pockets.

“They have a real front, after our people have suffered more than nine years of austerity as a result of the financial crash caused by the irresponsibility and greed of the bankers.

“I am calling on Sajid Javid to send them packing and to prevent them getting their noses in the trough.”