Where Reeves may splash the cash at the spending review
Health and Defence look likely to be the big budget winners with other departments not getting what they want
Rachel Reeves is about to lay out the Government’s expenditure plans with the announcement of the spending review this week.
On Wednesday, departments across the board, from health to housing, education to environment, will discover what their budgets are likely to look like for the next few years.
There have already been some strong indications of where some of the money will go with the Chancellor announcing a major investment in transport links last week.
Defence and the NHS are also expected to be winners in the lion’s share of funding.
Meanwhile, the Home Secretary and the Deputy Prime Minister are reported to be still wrangling with the Treasury over how much their departments will receive.
The BBC has reported that total departmental spending will increase under the Government. A Treasury document, released to the broadcaster, has revealed there will be roughly £100bn more in total spending by 2029/30 than when Labour took office. But it does not mean good news for everyone.
We take a look at who is likely to gain and who may lose out in their bids for a bigger budget.
NHS
The Department of Health and the NHS are expected to be big winners in the spending review.
The Times has reported that the health service will receive a boost of up to £30 billion at the expense of other public services as the Department of Health sees its day-to-day budget increasing by 2.8 per cent in real terms annually over the three-year spending review period.
It comes after Sir Keir Starmer pledged to have 92 per cent of patients treated within 18 weeks by the next election.
Infrastructure
The Chancellor may also direct £113 billion a year towards extra infrastructure spending, designed to boost the economy.
This could include funding for the development of the Sizewell C nuclear power plant in Suffolk.
Other possible infrastructure investment projects are smaller modular reactors across both England and Wales.
Transport
Spending on transport links has already been disclosed by the Chancellor ahead of Wednesday’s announcement.
Reeves revealed last Wednesday there would be billions of pounds of investment in transport links in the Midlands, the North and the West Country.
Trams in Greater Manchester will get £2.5bn to extend the network and in the West Midlands, they will get £2.4bn to extend services.
There will also be £2.1bn to start building the West Yorkshire Mass Transit programme by 2028 and new bus stations in Bradford and Wakefield.
South Yorkshire, Liverpool, the North East, the Tees Valley, the West of England and the East Midlands are also in line for transport investment.
The Chancellor indicated this may not be all, adding there will be “more to come next week”.
Defence
The Ministry of Defence is also expected to be one of the departments gaining the most from next Wednesday’s announcement.
Spending on defence will rise from 2.3 per cent of gross domestic product (GDP) to 2.5 per cent by 2027. That’s an extra £5bn a year but at the expense of the overseas aid budget.
The Prime Minister has also indicated that he wants to increase defence spending to 3 per cent 7of GDP by 2034.
But Nato Secretary General Mark Rutte is reported to want alliance members to increase still further to boost defence spending to 3.5 per cent of GDP so there could be further announcements in the pipeline.
Prisons
The Ministry of Justice is under pressure to deal with the overcrowding crisis in prisons.
In response, the Lord Chancellor the RT Hon Shabana Mahmood announced last month that the Treasury will fund prison expansion plans.
There will be a total capital investment of £4.7bn to start building three new prisons.
Police
The Met Police commissioner Sir Mark Rowley, Gavin Stephens, the head of the National Police Chiefs’ Council, and Graeme Biggar, the head of the National Crime Agency, have appealed directly to Sir Keir Starmer for full funding, warning of “stark choices about which crimes we no longer prioritise” if their pleas are ignored.
The Chancellor said last week that the Government would be increasing spending on police but has also said that not every department will get everything they want.
At present, Home Secretary Yvette Cooper is understood to still be in negotiation with the Treasury over the budget for her department.
Councils
The Local Government Association has said councils could face a funding gap of more than £8 billion by 2028/29 without adequate additional funding.
It said: “Without urgent action in the Spending Review, not only will many councils face impossible choices on what desperately needed services they can provide in the future, but also the opportunity to boost growth and reform may be missed”.
But there has not yet been any firm commitment made on local government spending and it is understood Deputy Prime Minister Angela Rayner is still in negotiations with the Treasury.
