8 Things We Learnt From Rachel Reeves' Spending Review As Labour Splashes The Cash

Chancellor Rachel Reeves speaking to the CommonsRachel Reeves has just unveiled the government’s spending plans for the next three years.It’s the first time the UK has had a multi-year spending review – where the Treasury sets out the budgets of government departments – since 2021.Making a statement in the House of Commons today, the chancellor also explained how much each department would have to invest in capital projects such as new buildings until 2030.Reeves said: “We are renewing Britain – but I know that too many people in too many parts of our country are yet to feel it.”As this was a spending review, not an annual Budget, Reeves did not reveal any tax changes or borrowing plans.Instead, she pledged to reject austerity and announced total departmental spending will increase by 2.3% more than inflation per year.So where is all that money going? Here’s what we know.1. Major investment in the NHS The government will be making a “record” cash investment in the NHS, increasing day-to-day spending by 3% annually for the next three years after inflation.This works out to an extra £29bn per year for the day-to-day running of the health service.Emphasising Labour’s support for the NHS, Reeves said she is also “increasing the NHS technology budget by almost 50%”.The government will put £10bn of investment into the health service too, to “bring our analogue health system into the digital age, including through the NHS app”.2. Labour to end use of asylum hotels by 2029Reeves promised the government would stop housing asylum seekers in British hotels at the expense of the taxpayer, fulfilling a Labour manifesto pledge.The chancellor also announced further funding of “up to £280m per year” for the new Border Security Command which is meant to crack down on small boat crossings.3. Defence spending gets a boostThe ministry of defence’s day-to-day budget will go up 0.7% in real terms, meaning an extra £11bn increase.The overall defence budget up to 2.3% of GDP (gross domestic product) to 2.6% by April 2027.The chancellor said that will include funds for Britain’s intelligence agencies.Ministers want to increase defence spending to 3% of GDP by 2034 but have not offered a specific date.It comes after the government already announced it was cutting the overseas aid budget in February to help fund this uplift in defence spending.Britain's Chancellor of the Exchequer Rachel Reeves leaves 11 Downing Street to announce the government's Spending Review in Parliament, in London, Wednesday, June 11, 2025. 4. £39bn set aside for social and affordable housingThe chancellor has set aside £39bn for social housing in England between 2026 and 2036.That works out to an average of £3.9bn a year – a major increase on the £2.3bn currently allocated per year.In another boost for national infrastructure, Reeves also announced there £15.6bn will be set aside between 2027 and 2031 for transport projects in English city regions outside of the capital.5. £3 bus fare cap extendedLabour’s £3 bus fare cap will be extended to “at least March 2027”.It comes after Labour extended the Tories’ £2 cap on bus fares until the end of 2025, and while also raising it to £3.6. Schools get a look inFree school meals will be extended to around 500,000 more children if their parents are on benefits. That will cost around £1bn up to 2029.Teachers will get an extra £615m this year to partially fund a 4% pay rise in England.The chancellor also announced investment was being hiked to nearly £2.3bn per year to fix “our crumbling classrooms”.A further £2.4bn per year will go towards rebuilding 500 schools.7. Police – and the ministry of justice – budget set to risePolice budgets are going up by an average of 2.3% each year – in real terms – by 2029.The Ministry of Justice will see average real-term rises in day-to-day spending of 1.8% per year, too.8. Which departments are missing out?The Home Office day-to-day budget is set to decrease by 1.7% in real terms over the next three years.The Foreign Office will see its spending slashed by 6.8% in real terms, too, mainly due to the cut in aid spending.Labour already announced that overseas aid would make up just 0.3% of national income by 2027, having previously represented 0.5% of GDP.The Liberal Democrats were also quick to point out that the spending review did not provide enough money for social care.The party’s Treasury spokesperson Daisy Cooper said: “This spending review was a missed opportunity to repair the damage done by the Conservatives and finally deliver on the promise of change. “Behind the smoke and mirrors is a potential blackhole for social care as local government budgets remain at breaking point. Putting more money into the NHS without fixing social care is like pouring water into a leaky bucket.”The research institute of the National Institute of Economic and Social Research (NIESR) criticised the review for not going far enough with overall capital spending.Its senior economist Ben Caswell said: “Despite the uplift, net public investment as a share of GDP remains at 2.7%, lower than in many other advanced economies.”Related...Labour To Scrap Asylum Seeker Hotels By 2029, Rachel Reeves AnnouncesSadiq Khan Attacks Rachel Reeves As Labour Tensions Boil Over Ahead Of Crunch SpeechMinister Peter Kyle Boldly Compares Labour's Arrival In Government To Steve Jobs' Apple Takeover

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