For most government departments, the spending review has been a game of two halves.There are huge boosts to capital spendingfor some – from nuclear to school rebuilding to rail to super computers.
But those projects will take a long time to build before voters can reap the rewards. And on day-to-day spending, there is a major squeeze on most departments.
Even thoughRachel Reevesdenounced austerity in her speech in the Commons, this will feel the same for many ministers, who are seeing their budgets cut even lower than they were under the Conservatives. So who has come out on top?
In pure numbers, health is the biggest winner of the spending review. Wes Streeting’s department will get almost £30bn extra a year for its budget, a rise of 3% for the NHS. Of that, £10 billion will be allocated overall for technology and digital transformation.
In comparison to some of the numbers his cabinet colleagues are looking at, it might sound churlish for Streeting to grumble. The Institute for Fiscal Studies suggests his budget rise is around 60% of the cash increase in the overall day-to-day-spending envelope.
But it is still lower than previous spending reviews – and Streeting had initially pressed for more. It might be more than double the rate planned for the average department, but still well below the long-running average of 3.6% and much lower still than the big funding increases under the lastLabourgovernment.
NHS chiefs and health experts are expected to voice concern at the funding on Wednesday, suggesting it will not go far enough to tackle backlogs, especially given that health service workers, including doctors and nurses, are expecting substantial pay rises.
Success rating: 7/10
One of the key priorities of the review was a big rise in the defence budget and it was one we knew was coming because of pledges in the strategic defence review to get spending to 2.6% of GDP by 2027, though that includes funding for the intelligences services.
But there is considerable pressure to go further with little idea of how to do so. The UK is expected to agree a further rise to 3.5% by the mid 2030s at the Nato summit later this month,under pressure from the US president, Donald Trump. Very little of what was set out in today’s spending review suggests how that will be met.
The cash set out in the review will mean £11bn for defence and £600m extra for security services, funded by big cuts to international aid, which is reflected in a massive cut to the Foreign Office’s day-to-day spending of around 5%.
For now, defence chiefs and the defence secretary, John Healey, have money to spend – but reaching their next target is currently a major puzzle.
Success rating: 8/10
Angela Rayner has one of the biggest wins of the spending review with her big new budget for affordable homes – but it reflects that fact she has one of the toughest targets to meet, a manifesto pledge to build 1.5m homes by the end of the parliament,which most experts say cannot be met.
Rayner fought for weeks over the settlement and was the second last to settle with the Treasury.For that she secured £39 billion for new social housingover the next decade, a big boost to the current figure of £2.3bn a year under the last government.
But there will be very tight settlements for local councils – the Ministry of Housing, Communities and Local Government is facing a 1.4% real-terms cut over the course of the spending review. The Local Government Association has warned councils “will remain under severe financial pressure” and that council tax increases are likely as well as possible future service cutbacks.
Rayner may also feel the pressure ofthe government’s decision to end the use of asylum hotels– which may then mean an increased pressure on social housing.
Success rating: 6/10
Yvette Cooper’s department is one of those leaving the spending review with the biggest headache – and was the last to settle with the Treasury. Reeves said that the government will save £1bn from ending the use of asylum hotels by the end of the parliament, heaping major pressure on the home secretary.
But the biggest headache is police funding – which senior police chiefs have warned will meanthe government will miss its police recruitment target of 13,000 neighbourhood officers, as well as being unable to meet pledges on knife crime and violence against women and girls.
Funding for police will rise by 2.3% a year in real terms over the spending review period, but some of this will be met locally, presumably then by council tax increases. The mayor of London, Sadiq Khan, has said he is deeply concerned by the level of funding.
Success rating: 2/10
Education will get a cash uplift of £4.5bn in the core schools budget, as well as £2.3bn in investment to fix school classrooms,especially those with crumbling concrete. From the capital budget, there will be £2.4bn a year to continue the rebuilding of 500 schools.
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And there was further investment too in the government’s big priorities –the delivery of free school breakfast clubsand of new nurseries based in schools, as well asfree school meals for all children on universal credit, which has delighted Labour MPs.
But looking behind the numbers, schools will face a very difficult three years of budgets. It equates to a 0.4% per annum increase in the core schools budget over the spending review period, with pressures of funding pay rises and growing costs in areas like special educational and disability needs (SEND).
Success rating: 5/10
One of the most maligned ministers in the press, Ed Miliband has walked away from the spending review one of its biggest winners, with by far the biggest increase in capital spending of all the departments, though starting from a lower base.
It will mean £13.2bn to continue an ambitious programme of home insulation – widely reported to be heading for cuts – as well as£8.3bn for Great British Energy. That pot will now include the government’s investment in small modular reactors, which Labour sources have claimed was always on the cards but which has taken some industry figures by surprise.
Miliband also secured considerable cash for energy infrastructure,including building Sizewell Cand £2.5bn to invest in fusion research.
Success rating: 9/10
The biggest win for the department was a large boost in flood defence funding – around £1.4bn each year and a 5% increase compared to the current period. There will also be increased cash in nature recovery, an overall budget of £7bn for schemes like environmental farming, peatlands and tree planting.
Farming is a mixed bag, as the department grapples with phasing out of the EU legacy subsidy scheme for farmers. Defra says it will invest more than £2.7bn a year and it will increase funding paid to farmers, but more details are yet to be released on exactly how that will be newly allocated. The NFU suggested that – depending on the way the new schemes are structures –overall there could be a £100 million cut to farming and countryside programmes.
Overall, the department has had its budget cut for day-to-day spending by 2.7%, though departmental sources said they got a bigger budget than they expected. Lots of those cuts are hoped to be met through administration, cutting the number of contractors and streamlining regulation and grants.
Success rating: 6/10
This was the area Reeves wanted to shout about – and where she had the cash to splash.Treasury rules – known as the green book – will changeto open up more investment outside of London and the south east for when civil servants assess the value for money of government projects.
Further announcements are expected for Northern Powerhouse Rail and East West Rail, and funding for the Midlands rail hub, as well as a £400m-plus investment in Welsh rail projects. Overall, it will mean a fourfold increase in local transport grants for areas outside London.
But London is the area missing out –the London mayor Sadiq Khan is furious that key transport projects in the capital will not be fundedand said that would have knock-on effects on growth as well as areas like housing.
Success rating: 9/10
The Foreign, Commonwealth and Development Office appears to be suffering the harshest real-terms cuts of the spending review – almost 7%. The main reason for that arethe cuts to overseas aid which have been funnelled into defence spending. Aid should in theory get some cash returned if the asylum hotel spend falls but no-one believes the Treasury would allow overseas aid to recoup that money.
A number of charities have raised alarm at the cuts and what it will mean for the UK’s international efforts, including funding the British Council and World Service, as well as diplomatic efforts as the wars in Gaza and Ukraine rage.
Success rating: 1/10