Fact check: how accurate are Rachel Reeves's spending figures?

Times

a day ago

'The chancellor's speech was full of numbers, few of them useful,' said Paul Johnson, the head of the Institute for Fiscal Studies.
Reeves's speech was political to the core — and that extended to her use of statistics. The chancellor appears to have used whichever numbers best suited her position, predominantly to inflate the scale of the government's spending plans.
She used bigger, cumulative figures to highlight the scale of investments, rather than annual numbers, and cash increases stripped of their context. She also used Tory spending plans from before the election, which never came to pass, as the baseline for the biggest numbers in her speech. When it did not suit her she ignored the Tory spending plans.
While none of the figures are technically inaccurate, economists argue that they are a statistical sleight of hand and that Reeves would be better off being consistent in her use of numbers.
Spending going up
The claim: The first number in Reeves's speech — bar her obligatory reference to the £22 billion 'black hole' she claims to have been left by the Tories — was the boast that 'in this spending review, total departmental budgets will grow by 2.3 per cent per year in real terms'.
The reality: This figure includes spending announced at the budget last year, where there were some of the biggest increases. Over the next three years, total spending — combining day-to-day and investment — will increase by 1.5 per cent. Day-to-day spending will rise by 1.2 per cent a year for the rest of the parliament, about half the rate it rose this year.
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More for public services
The claim: Reeves promised to add '£190 billion more to the day-to-day running of our public services' as well as an extra £113 billion to public investment.
The reality: This is a comparison with previous Conservative plans — dismissed as 'essentially fictitious' by Johnson — drawn up before the election to set a trap for Labour and allow Rishi Sunak to promise tax cuts.
The Tory plans envisioned day-to-day spending rising by only about 1 per cent a year, and big cuts in capital spending. Reeves reversed these by changing her fiscal rules to allow more borrowing and is increasing infrastructure spending. But on an annual basis, capital spending will be £151.9 billion in 2029-30, £20.6 billion more in cash terms than it is now. Day-to-day spending will rise by £50.7 billion by 2028-29.
More for schools
The claim: Reeves said she was providing a 'cash uplift' of more than £4.5 billion for schools by the end of the spending review period.
The reality: Context is everything. The Treasury concedes in the small print that the core budget for schools will rise by 0.4 per cent over the next three years. It says that when the cost of expanding free school meals is stripped out of the figures 'you get a real-terms freeze in the budget'.
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Backing innovation
The claim: Reeves declared that the government was 'backing [Britain's] innovators, researchers and entrepreneurs' with research and development funding rising to a 'record high of £22 billion per year by the end of the spending review'. In a press release the government said that spending on research and development was £86 billion.
The reality: Despite the rhetoric, this spending pledge represents a significant scaling back of the government's investment ambitions in research and development. The previous government pledged to hit the £22 billion target by this year and then delayed it until 2027. This target has now been put back even further to 2029.
Indeed, the Department for Science, Innovation and Technology's budget will barely rise at all next year — far from the rhetoric of Reeves's statement.
The £86 billion referred to in government press releases is a cumulative figure.
More for social housing
The claim: Reeves boasted of 'the biggest cash injection into social and affordable housing in 50 years', saying this would total £39 billion over ten years.
The reality: The figure would represent almost a doubling of the £2.3 billion affordable homes programme. However, this spending ramps up slowly, reaching just £4 billion a year by the end of the parliament, leaving it to future chancellors to find ways of maintaining the spending.
The overall capital budget for the housing ministry is actually flat over the spending review, with ministers relying on savings elsewhere — especially a reduction in the capital costs to councils of homes for asylum seekers. If these savings fail to materialise, painful decisions will be needed.
NHS spending
The claim: With health the big winner, Reeves boasted of 'an extra £29 billion per year for the day-to-day running of the health service' along with a 50 per cent boost in the NHS technology budget.
The reality: The £29 billion figure is for NHS England specifically, and its budget will rise by 3 per cent a year in real terms, within a 2.8 per cent per year overall Department of Health rise.
Capital budgets were increased last year but will be held flat for the rest of this parliament. Increasing technology spending further will therefore come at the cost of crumbling buildings or modern scanners and other kit.
NHS leaders are already saying they will find it harder to shift to more modern, efficient treatments without extra equipment and buildings.
Efficiency savings
The claim: Reeves said the government had carried out a zero-based review of all government spending that would make public services 'more efficient and more productive' and, according to the Treasury, save £13 billion a year by 2029.
The reality: These savings are, to put it charitably, extremely hypothetical and in some cases seem wildly optimistic. The NHS, the government thinks, will save nearly £9 billion from higher productivity — despite the fact that the health service has got less rather than more productive since Covid. And the culture department thinks it will save £9 million from 'digital reform' — despite the fact that the MoD, which is a much larger organisation, only thinks it can save £11 million.
Overall the savings appear, at best, to be highly aspirational. But if they are not met, it will have a real-world impact on the amount of money the government has for public services.