Rachel Reeves’ upcoming spending review is seen as a crucial test for the new Labour government, offering a glimpse into their priorities and values. The Treasury aims to promote its generosity through this review, but it’s essential to acknowledge the losers alongside the winners.
The review will unveil how £650bn in government funding will be divided among departments over the next three years. Health and defence are expected to win, with pre-existing commitments prioritising the NHS and increasing defence spending.
However, the headline figure of an “£86bn boost” to research and development is misleading. This amount represents a calculated increase in R&D investment, reaching £22.5bn annually by 2029-30, rather than new funding.
Schools will see a £4.5 billion boost over three years, or £1.5 billion per year, with plans for extending free school meals and increased teachers’ pay. The Department of Work and Pensions is facing planned cuts, while the Home Office and Local Government departments are bracing for spending reductions.
The Labour government’s decision to loosen rules around borrowing for capital investment gives them more room to fund long-term projects like regional transport initiatives, worth £15.6 billion. However, there’s a risk that the story of this review will focus on departments losing out and promises slipping, rather than the generosity of these investments.
Source: https://news.sky.com/story/real-risk-rachel-reevess-spending-review-will-be-about-the-departments-that-have-lost-out-13380746