As the government prioritizes the NHS and defense at the expense of other services, strict areas of the UK, including councils and police, face even more pressure on spending reviews.
Prime Minister Rachel Reeves will make a political bet on Wednesday that setting up government spending plans until the next general election and improving health services is essential to the potential for workers to be re-elected.
Authorities say the Prime Minister has set the NHS up 2.8% in daily health spending each year over a three-year spending review period starting next April.
The service was founded in 1948 and has seen a rise less than long-term growth, but a rise in cash terms of £30 billion a year between 2028 and 29 is significantly better than some of the services feared.
Matthew Taylor, CEO of the NHS Coalition, representing health managers, said service leaders have recognized that all public services are under great pressure.
“A government that commits to providing large funding to the NHS will be extremely tough for services such as housing, education, and welfare, especially as it can affect people’s healthcare needs,” he added.
The defense is also expected to reflect a shift in UK priorities as the US pressures European countries to spend more on their troops. The government has already vowed to increase defence spending to 2.5% of GDP by 2027.
In last year’s budget, Reeves set parameters for daily overall spending, which envisaged a real-world growth of 1.2% per year between 2026-27-2028.
However, Max Warner, an economist at the Institute for Financial Studies, said Reeves is dedicated to the NHS, meaning that defense will narrow down the annual real-world reduction in daily spending by 0.3%.
“Health is returning to its traditional place as a winner of the spending review,” Warner said. Still, he noted that the 2.8% settlement initially reported by The Times was less than the historic long-term growth rate of 3.6% per year on actual terms.
Facing everyday spending cuts, the areas that have endured salami slices over the past decade, including courts, councils and transportation.
Finance officials have confirmed that some departments will make actual cuts over the course of three years. But “we can’t really think that every sector should increase the real world.”
Security, health and economy will be three main themes in Reeves’ speech on Wednesday. She also highlights the £113 billion additional capital expenditure funded by borrowing, effective last fall by fine-tuning government fiscal rules.
The Prime Minister will say new investments across the country are only possible due to her “choices,” a mix of general financial discipline regarding daily spending, and a labor plan to borrow for investment. “This money is only available for her decision,” one aide said.
Torsten Bell’s Minister Pension said on X on Sunday:
Among the options Reeves will reveal on Wednesday, the core school budget, which covers students ages 5-16, has an extra £4.5 billion a year by 2028/29.
The annual school budget means a budget of £64 billion, which means an increase of about 7% over three years. One education expert said: “It’s hard to say what this actually means until we get the details, but these numbers suggest that schools are relatively protected.”
Reeves could portray allocations to several other departments as a generosity exercise, even if the numbers just tread on water with inflation.
The government said on Sunday that the spending review would allocate £86 billion to research and development over four years without providing details of its distribution. The 2025-26 pound figure will rise to 22.5 billion pounds by 2029-30.
According to the Science and Engineering Campaign, despite what the Minister calls this “transformative,” R&D spending will actually remain substantially widespread and flat.
Most departments had settled in the Treasury Department prior to Wednesday, but authorities admitted that negotiations were not a simple voyage. “It’s not a painless moment,” he said.
Interior Secretary Yvette Cooper argues that services need more cash to meet their ambitious crime prevention goals.
The Home Office has also struggled to cut how much foreign aid is spent on hotel bills for UK asylum seekers, an estimate of just under £2.2 billion for the fiscal year, close to £2.3 billion the previous year.
According to Treasury officials, Deputy Prime Minister Angela Rayner, who is responsible for housing and local governments, is locked up in last-minute negotiations on details of the council’s funding fine.
Additional reports from Laura Hughes and Clive Cookson
