Spending review 2025: key points at a glance

Yahoo

19-06-2025

The chancellor talks up the government's economic record and the decisions made at the budget. She makes the obligatory mention of the Conservatives' '14 years of mismanagement and decline' and the supposed £22bn fiscal hole. 'We are renewing Britain,' she says – while accepting that many Britons 'have yet to feel it'. This spending review will change it, she says.
Reeves says the review is 'time for parties opposite to make their choices', adding that the spending and investment she will unveil is only possible because of tax choices in the autumn budget and the revised fiscal rules, which the Conservatives opposed. They must make 'an honest choice' on whether to support the extra money, she says.
Reeves says overall departmental spending will rise by 2.3% a year in real terms, contrasting her 'Labour choices' with what she calls the destructive legacy of austerity. That is the overall figure, but some departments will still feel a squeeze, even with what the chancellor says is an extra £190bn in day-to-day spending over the parliament.
Related: Rachel Reeves delivers spending review and says use of hotels for asylum seekers to end 'in this parliament'– UK politics live
On the first set of specifics, Reeves sets out already-announced details of increased spending on defence and security, making sure to stress the boost to jobs in the sector, particularly in Scotland.
Reeves says the new Border Security Command will receive up to £280m more a year by the end of the spending-review period. She also promises that all spending on hotels for asylum seekers waiting for their cases to be heard will stop by the end of this parliament.
In more 'news we have largely already been told', Reeves sets out what she says will be £30bn in investment in nuclear power, of which about half will go to the Sizewell C reactor. She also announced new money for small modular nuclear reactors, and for research into nuclear fusion. There is also confirmed funding for a carbon capture project in Aberdeenshire.
While this isn't necessarily an announcement, Reeves's long digression into the importance of steel made in the UK can be seen at least partly in the context of Nigel Farage's recent forays into pushing for reindustrialisation.
In a mixed bag of announcements, the chancellor says there will be £2bn more for investment in artificial intelligence; an increase in funding for the state-run British Business Bank; and up to £1.2bn a year by the end of the parliament for skills training for young people.
Now we get to the bigger news. As saved up for release the day before the spending review, Reeves sets out what she calls the 'biggest cash injection into social and affordable housing in 50 years', saying it is worth £39bn over the next decade.
Also partly briefed in advance, Reeves talks about investment in rail, airports and buses, including a boost to 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 (the last not unconnected to next year's Senedd elections). She says she will provide a fourfold increase in local transport grants for areas outside London, and that Transport for London will get a four-year spending deal. Finally, she promises a change to Treasury rules to allow for more spending across the regions.
This involves £350m for facilities such as parks, libraries and swimming pools in a series of towns. Reeves lists a few, the bulk of which appear to be represented by Labour MPs.
The chancellor says she will increase police spending by 2.3% a year in real terms. This sounds reasonably significant, but police organisations seem likely to insist the increase will not properly help protect services, and it was the home secretary, Yvette Cooper, who had the longest and toughest pre-review fight with the Treasury. Reeves also mentions the previously announced £7bn to finance 14,000 new prison places.
Almost skated over in the address, Reeves confirms she will fully honour the Labour manifesto commitment of a £13.2bn fund to fix draughty homes and install heat pumps and solar panels. The chancellor does not mention this as an environmental measure, but as a way to, she says, save people an average of £600 a year in bills.
Also already announced, but in the absence of any plan to end the two-child benefit cap it gives Reeves the chance to talk about reducing child poverty. She also announces £370m for schools-based nurseries and £555m to stop children going into care when it can be prevented.
Reeves sets out what she says will be £2.3bn a year to fix and maintain existing schools, and £2.4bn on building new schools.
The chancellor saves this until last, bringing cheers from Labour MPs by promising a real-terms 3% a year addition to spending on the health services over the parliament, saying this will amount to an extra £29bn in spending overall.