Amidst growing anticipation and concern, Chancellor Rachel Reeves is reportedly delaying the unveiling of the comprehensive spending review detailing Whitehall department budgets. The announcement, initially slated for spring, is now likely to occur in June as Treasury officials brace for intricate and potentially contentious negotiations with cabinet ministers, according to inside sources.
Navigating Complex Budget Deliberations
The decision to postpone the spending review announcement stems from the realization that agreeing on individual department budgets may prove to be a lengthy and complicated process. As one insider revealed, “This was supposed to be done in spring, but they’ve realized as they’ve started talking to ministers that it could be a much longer, more complex process.”
Government officials have refuted claims of a delay, maintaining that the original target was always to publish the review between May and July. A spokesperson stated, “At the budget, the chancellor confirmed that the second phase of the spending review would conclude in late spring – we are still on track to deliver this.”
Short-Term Planning and Departmental Disparities
In last month’s budget, Reeves presented a one-year spending review, enabling departments to plan until 2025-26. This interim measure resulted in significant disparities, with certain departments receiving substantial real-terms increases while others faced notable cuts.
The Department of Health and Social Care emerged as a clear winner, securing an additional £25bn over the next two years, translating to a 3.8% rise above inflation. In contrast, the Home Office is set to see its budget fall by 2.7% in real terms, while the Department for Transport will contend with a 2.5% cut.
Friction and Dissent Among Ministers
The process of finalizing the one-year review was marked by occasional friction, with several cabinet ministers expressing their discontent to Prime Minister Keir Starmer regarding the cuts they were expected to implement. A particular point of contention was the Treasury’s request for capital spending cuts of up to 10% to achieve immediate savings, though most departments ultimately secured funds to increase their capital spending.
Long-Term Implications and Public Service Concerns
As officials prepare for the upcoming spending review, which will establish budgets until 2029, similar challenges and debates are anticipated across Whitehall. The Treasury’s current assumptions indicate that day-to-day spending will rise by an average of 1.5% above inflation, but much of this funding will be allocated to protected departments like health and defense over the next two years, leaving others vulnerable to cuts.
The Office for Budget Responsibility has cautioned that Reeves’ plans could result in average cuts of 1.3% for unprotected departments from 2025-26 to 2028-29. Experts warn that this could strain already-stretched public services, such as courts, border control, and local government, just before the next election.
“Spending is heavily front-loaded. Current plans beyond 2025-26 once again imply cuts to unprotected departments, which will make it difficult for some services – local government and the criminal justice system in particular – to improve before the next election.”
– Institute for Government briefing paper, “Austerity postponed?”
As the nation awaits Reeves’ crucial spending review announcement in June, questions remain about how the Chancellor will balance the competing demands of government departments, public services, and fiscal responsibility. The delayed timeline underscores the complexity of the task at hand and the potential for further discord as budget negotiations unfold in the coming months.
