Streamlined highlights from the Spending Review:
In the Commons, Rachel Reeves has outlined the spending plans for government departments till 2029. This budget covers day-to-day funding used for wages and a department's investment (capital) budget over the next four years, which funds new infrastructure projects.
The last spending review occurred during the COVID-19 pandemic and before that in 2015. Here's a breakdown of the key announcements:
Departments on the Up and Down
Our analysis reveals which government departments have seen an increase in their budgets and those that seem to have taken a hit.
The Ministry of Defence is a major winner, with a rise in defense spending from 2.3% of GDP to 2.6% by 2027, equating to an £11bn increase and a £600m boost for security and intelligence agencies. The department will also gain £4.5bn for domestic munitions production and more than £6bn to upgrade nuclear submarine production. In total, an extra 3.8% will be spent from this year to the end of 2029.
On the other hand, the Foreign, Commonwealth and Development Office (FCDO) is one of the biggest losers, with a total decrease of 8.3% over the next three years. Its capital and day-to-day spending will drop by 6.8% and 6.9% respectively.
The health sector witnesses a significant boost, with the chancellor announcing a £29bn annual increase for the NHS, representing a 3% rise on current levels. She also plans to raise the NHS technology budget by almost 50% and invest £10bn to modernize the health system, bringing it into the digital age.
Other Notable Mentions
- Asylum and border security: The chancellor has announced increased funding for border security, with £280m more per year by the end of the spending review for the new Border Security Command. The Home Secretary Yvette Cooper aims to end hotels being used to house asylum seekers by 2029.
- Education and training: Free school meals will be extended to over half a million more children, and nearly £2.3bn a year will go towards fixing crumbling classrooms. A further £2.4bn will be spent on rebuilding 500 schools. Investment in training and upskilling will reach £1.2bn a year by the end of the spending review, aimed at supporting more than a million young people into training and apprenticeships.
- Housing: The government has earmarked £39bn for social and affordable housing over the next 10 years, which Reeves calls the "biggest cash injection into social housing in 50 years." She also plans to invest an additional £10bn for financial investments, to be delivered through Homes England, to help unlock hundreds of thousands more homes.
- Energy: The commitment to nuclear power continues, with £30bn allocated. £14.2bn is earmarked for the Sizewell C nuclear power station, while £2.5bn will be invested in a new small modular reactor programme.
- Science and technology: The chancellor wants Britain's high-tech industries to lead the world in the future, with research and development funding set to reach a record high of £22bn a year by the end of the spending period.
- Artificial Intelligence: The chancellor has pledged a £2bn investment in home-grown AI, with the potential to create good jobs and solve diverse challenges.
- Transport: The chancellor has announced £15bn for new rail, tram, and bus networks across the West Midlands and the North, including a new rail line between Liverpool and Manchester. Investment in buses, train stations, metro lines, and transit will be made in places including Rochdale, Merseyside, Birmingham, and West Yorkshire.
- Justice: To fund 14,000 new prison places, £7bn will be invested, and £700m a year will go towards reforming the probation system. To reach the goal of 13,000 more police officers in England and Wales, £2bn will be distributed.
- Nations: The chancellor has allocated £52bn for Scotland, £20bn for Northern Ireland, and £23bn for Wales.
The increase in defense spending from 2.3% of GDP to 2.6% by 2027, equating to an £11bn rise, is a significant development in the realm of politics and finance, particularly with regards to the business sector and general-news, as it affects the Ministry of Defence's budget. On the contrary, the Foreign, Commonwealth and Development Office (FCDO) faces a total decrease of 8.3% over the next three years, signifying a notable change in its financial status.
In the context of the health sector, a £29bn annual increase for the NHS represents a 3% rise on current levels, demonstrating a substantial shift in finance and politics, considering the importance of this sector in the daily lives of the general public.
