Spending Review

Posted by Nigel on Wednesday 11th of June 2025.

Key points at a glance

Rachel Reeves pictured outside 11 Downing Street

 

Chancellor Rachel Reeves has given details of the UK's first multi-year spending review since 2021.

The review sets the day-to-day budgets of government departments over the next three years, used to pay staff and deliver public services.

It also sets their investment budgets until the end of the decade, to pay for new infrastructure such as hospitals, schools, and military kit.

Here is a summary of the key points.

HEALTH

  • Day-to-day budget for the NHS in England to go up by 3% in real terms on average over the next three years, to £226bn by 2029.

EDUCATION

  • Core schools budget in England to go up by 0.4% in real terms on average over the next three years

  • Free school meals to be extended to around 500,000 more children whose parents are receiving benefits, costing around £1bn up to 2029

  • Extra £615m this year to partially fund a 4% pay rise for teachers in England, with schools expected to fund a quarter of the rise through "improved productivity"

 

 CRIME AND BORDERS 

  • Home Office day-to-day budget to go down by 1.7% in real terms over the next three years

  • The "spending power" of police forces will go up by an average 2.3% per year in real terms by 2029, assuming local taxes go up too

  • Annual funding for the Border Security Command, responsible for tackling small boat crossings, to increase by up to £280m by 2029

  • Pledge to end the use of hotels to temporarily house asylum seekers before the next election

  • The Ministry of Justice, which saw big cuts during the austerity era, to see average real-terms rises in day-to-day spending of 1.8% a year

DEFENCE

  • Ministry of Defence day-to-day budget to go up 0.7% in real terms, with investment spending over the period averaging 7.3%

  • Defence spending is due to rise from 2.3% to 2.5% of overall economic output by 2027

HOUSING 

  • £39bn allocated for social housing in England between 2026 and 2036, an average of £3.9bn a year over the period compared to £2.3bn currently

 TRANSPORT
 

  • £15.6bn allocated between 2027 and 2031 for transport projects in English city regions outside London

  • Additional £11.5bn committed towards the cost of building the Sizewell C nuclear power plant in Suffolk, which will also require private investment

  • £3 cap on single bus fares in England extended until March 2027

  • Rules used by Treasury officials to assess proposed infrastructure projects to be updated

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