Spending review 2025: What's in and what's not after Rachel Reeves announces government budgets

Independent

a day ago

She has unveiled what amount to cuts for some departments, fuelling accusations Labour is returning the country to the austerity agenda pursued by the Conservatives.
But the chancellor has also splashed the cash in key areas as she bids to convince voters Labour is listening to their concerns and reverse the party's decline in the polls.
The Independent looks at what is in the spending review, and, crucially, what is not…
£15bn boost for regional transport
The chancellor highlighted £15.6 billion of transport spending in England's city regions as part of a £113 billion investment spree.
The £15.6 billion package for mayoral authorities included funding to extend the metros in Tyne and Wear, Greater Manchester and the West Midlands, along with a renewed tram network in South Yorkshire and a new mass transit system in West Yorkshire.
£16bn cash injection for nuclear projects
The spending review also contained £16.7 billion for nuclear power projects, including £14.2 billion for the new Sizewell C power plant in Suffolk.
Boost for borders
Ms Reeves also rolled out hundreds of millions of pounds worth of spending to secure Britain's borders. She is offering up to £280 million per year to the Border Security Command Labour has set up to tackle people smuggling gangs.
And she confirmed that the government will end the use of asylum hotels by 2029, saving the taxpayer billions of pounds.
Skills and industry funding
Ms Reeves has also promised to plough £22 billion per year into research and development funding, highlighting the potential for AI developed in the UK to 'solve the daunting challenges' facing the country.
She she announced £2 billion specifically for the government's AI action plan and £6 billion to encourage start-ups to grow in Britain.
£39bn to fund social and affordable homes
The review also promised £39 billion over the next decade to fund affordable housing in what has been billed as the biggest investment in a generation.
Ms Reeves set out plans to almost double annual investment in affordable homes to £4 billion by 2029-30, compared to £2.3bn between 2021 and 2026. The money will go to local authorities, private developers and housing associations.
£30bn cash injection for NHS spending
The NHS was also one of the big winners in next week's spending review, with a boost of up to £30 billion at the expense of other public services.
The Department for Health and Social Care got one of the biggest settlements in the government's spending review, while other areas faced cuts.
Its budget will rise by 3 per cent each year for three years - a cash increase of £29 billion by 2028.
£3 bus fares capped
The chancellor also extended the £3 cap on bus fares until 2027, arguing that without it a single journey between Leeds and Scarborough could cost as much as £12.
School budgets boosted
The chancellor has promised a £4.5 billion uplift in the budget for schools each year, with £2.3 billion each year to fix 'our crumbling classrooms'.
Ms Reeves said her schooling experience in the 1980s and 1990s, including being taught in temporary classrooms, showed her the necessity of investing in schools. She wrote for The Independent on the same topic last week.
Millions for Welsh railways
Ms Reeves also rolled out £445 million to pay for upgrades to Welsh railways.
... Two-child benefit cap?
Labour backbenchers will be feeling let down by Ms Reeves after her spending review. Expectations had been building that a climbdown by the government on the Tory-era two-child benefit cap was imminent.
But, in a spending review containing few positive surprises, the chancellor ducked the opportunity to lift the cap - hated by Labour MPs.
And nothing for London
Sir Sadiq Khan has kicked up a fuss about the lack of investment in London and the Treasury's refusal to give mayors the power to levy tourist taxes.
The London mayor aso fought for support for several transport projects as well as a substantial increase in funding for the Metropolitan Police - with his lobbying failing to win over Ms Reeves.