Spending Review: When is it and what might Rachel Reeves announce?

Chancellor Rachel Reeves is facing immoderate hard choices successful the upcoming Spending Review, which sets the budgets for each authorities departments implicit the adjacent fewer years.

The reappraisal volition corroborate however overmuch taxpayers' wealth volition beryllium spent connected the NHS and different nationalist services utilized by millions, arsenic good arsenic however overmuch wealth the authorities plans to put successful projects similar caller nationalist transport schemes.

The Spending Review volition beryllium delivered by Reeves connected Wednesday, 11 June.

In October she acceptable section budgets for 2025-26, and volition present corroborate spending allocations for the pursuing 3 to 4 years.

Reeves has already acceptable retired what is known arsenic the "spending envelope" - however overmuch total government spending volition emergence by implicit the period.

On Wednesday this volition beryllium breached down by department.

The reappraisal covers 2 categories of spending:

• day-to-day spending which includes things similar salaries, supplies and different medication costs. This is known arsenic "resource" spending
• investment which includes backing for infrastructure arsenic good arsenic gathering things similar caller schools, hospitals and roads. This called "capital" spending

Wednesday's Spending Review volition acceptable retired day-to-day expenditure for 3 years and concern spending for 4 years.

Government borrowing - which is the quality betwixt however overmuch it spends and however overmuch it raises from taxes - grew to £20.2bn successful April.

That was £1bn higher than the aforesaid period successful 2024, and much than immoderate economists expected.

Although taxation gross accrued successful April, notably arsenic a effect of the summation successful the magnitude of National Insurance Contributions (NICs) paid by employers, truthful did spending.

This was mostly due to the fact that of increases successful pensions and different benefits and different wage rises arsenic good arsenic higher borrowing costs.

Meanwhile, the fiscal buffer that allows Reeves to conscionable the government's 2 self-imposed fiscal rules is precise slim.

The rules are that:

• day-to-day authorities spending should beryllium paid for with taxation revenue, not borrowing, and
• the magnitude of authorities indebtedness should autumn arsenic a stock of nationalist income by the extremity of the existent parliament successful 2029-30

The authorities is presently forecast to person a fund surplus of £9.9bn astatine that constituent - which is the third-smallest connected record.

This surplus is often referred to arsenic "headroom" and theoretically acts arsenic buffer against an economical daze oregon an summation successful spending.

But due to the fact that the projected surplus is truthful small, it is precise vulnerable, Between the Autumn Budget and Spring Statement successful March, it was wiped retired mostly due to the fact that of higher indebtedness involvement payments arsenic good arsenic sluggish economical growth.

As a result, Reeves announced a £14bn bundle of savings successful March, including £4.8bn of payment cuts.

The latest authoritative information suggests that the UK system could beryllium strengthening. It grew by 0.7% betwixt January and March, which was amended than expected.

However, it is not wide whether that maturation volition continue, particularly arsenic US President Donald Trump's US tariffs deed the UK and wider planetary economy.

The authorities has already announced however overmuch full spending connected day-to-day moving costs and connected concern volition summation by implicit the years covered by the Spending Review.

The "relatively modest" rise could mean that "sharp trade-offs are unavoidable", according to the Institute for Fiscal Studies (IFS) deliberation tank.

For example, the authorities has said that the overseas assistance fund volition beryllium chopped to money a crisp summation successful defence spending.

Spending connected defence volition emergence from 2.3% of gross home merchandise (GDP) to 2.5% by 2027. That's astir an other £5bn a year. Ministers privation to summation defence spending further to 3% by 2034.

As yet, determination are nary details astir however overmuch wealth volition beryllium allocated to the Department of Health and Social Care (DHSC), which oversees the NHS.

But owed to its size - astir 40% of full departmental expenditure this twelvemonth volition spell to DHSC - its fund tin person a sizeable interaction connected those of different departments.

What is known is the authorities volition extend escaped schoolhouse meals to astir 500,000 children whose parents are receiving Universal Credit, careless of their income. Education Secretary Bridget Phillipson said the authorities has acceptable speech £1bn to money this.

Reeves has confirmed that the authorities volition revise its arguable determination to bounds Winter Fuel Payments to those successful receipt of means-tested benefits.

But portion the authorities volition stock immoderate accusation astir who volition person the outgo arsenic portion of the Spending Review, afloat details volition not beryllium released until the Budget aboriginal successful the year.

Also chartless is whether Reeves volition accidental thing astir the two-child payment cap. Phillipson has said the authorities is looking astatine scrapping it but admitted doing truthful would "cost a batch of money".

The authorities has said it wants to summation investment.

Reeves has tinkered with the mode that indebtedness is measured to escaped up much than £100bn to money building, probe and improvement arsenic good arsenic different large projects.

On Wednesday, the chancellor announced a £15.6bn bundle to fund extensions to trams, trains and buses successful Greater Manchester, the Midlands arsenic good arsenic Tyne-and-Wear, aft disapproval that excessively overmuch infrastructure spending targeted London and the south-east.

There person been reports that she could denote a caller atomic powerfulness presumption successful Suffolk.

Sizewell C, a task that is jointly owned by the UK authorities and the French state-owned vigor elephantine EDF, wants to statesman operation of a powerfulness presumption that volition beryllium funded by taxpayers and backstage investors.

The authorities whitethorn besides acceptable retired elaborate plans to physique tiny modular reactors (SMRs) - mini atomic powerfulness stations - successful England and Wales.