Ministers Seal Spending Deals with Rachel Reeves’ Treasury Just Hours Before Big Reveal

Ministers have finally all agreed spending deals with the Treasury, No10 confirmed this afternoon, just 48 hours before they are to be revealed by
Rachel Reeves
.

Haggling had been raging this morning, with Home Secretary
Yvette Cooper
desperately trying to get more money for the police and borders funding.

The Chancellor is due to lay out departmental allocations running up to 2029 – the likely timetable for the next
general election
– on Wednesday.

But the generous fiscal envelope set at the
Budget
last Autumn has been put under massive pressure by the economic slowdown, calls for more defence cash, and
Labour
revolts on benefits.

Speaking to reporters on Monday afternoon, the Prime Minister’s official spokesman said: ‘The spending review is settled, we will be focused on investing in Britain’s renewal so that all working people are better off.

‘The first job of the Government was to stabilise the
British economy
and the public finances, and now we move into a new chapter to deliver the promise and change.’

Ms Reeves has signalled she will announce real-terms increases to budgets for police as she tries to quell
Home Office
resistance.

However, that is likely to be offset by cuts to other areas, with the
NHS
and defence sucking up funding.

The political backdrop to the proposals this week is the Reform surge, with Labour panicking about the challenge from Nigel Farage.

Touring broadcast studios this morning, Technology minister Chris Bryant denied the review will mark a return to austerity.

But he acknowledged some parts of the budget will be ‘more stretched’.

He told Times Radio: ‘That period of austerity where I think previous governments simply cut all public service budgets just because they believed that was what you had to do is over.

‘But, secondly, we are investing, but it’s not just about spending money, you have to get return, and that means we have to have change and we have to have a plan for change in every single one of our public services.’

He pointed to increased investment in defence and health, but added: ‘There are going to be other parts of the budget that are going to be much more stretched and be difficult.’

Ms Reeves will have some £113billion to distribute that has been freed up by looser borrowing rules on capital investment.

But she has acknowledged that she has been forced to turn down requests for funding for projects she would have wanted to back in a sign of the behind-the-scenes wrangling over her spending review.

Economists have warned the Chancellor faces unavoidably tough choices in allocating funding for the next three years.

She will need to balance manifesto commitments with more recent pledges, such as a hike in defence spending, as well as her strict fiscal rules which include a promise to match day-to-day spending with revenues.

The expected increase to police budgets comes after two senior policing figures publicly warned that the service is ‘broken’ and forces are left with no choice but to cut staff to save money.

Nick Smart, the president of the Police Superintendents’ Association, and Tiff Lynch, acting national chairman for the Police Federation of England and Wales, said policing was in ‘crisis’.

In a joint article for the Telegraph, they said: ‘Police forces across the country are being forced to shed officers and staff to deliver savings. These are not administrative cuts.

‘They go to the core of policing’s ability to deliver a quality service: fewer officers on the beat, longer wait times for victims, and less available officers when crisis hits.’

The Department of Health is set to be the biggest winner in Ms Reeves’ spending review on Wednesday, with the NHS expected to receive a boost of up to £30billion at the expense of other public services.

Meanwhile, day-to-day funding for schools is expected to increase by £4.5billion by 2028-9 compared with the 2025-6 core budget, which was published in the spring statement.

Elsewhere, the Government has committed to spend 2.5 per cent of gross domestic product on defence from April 2027, with a goal of increasing that to 3 per cent over the next parliament – a timetable which could stretch to 2034.

Ms Reeves’ plans will also include an £86billion package for science and technology research and development.

But Sadiq Khan’s office is concerned the spending review will include no new projects or funding for London.

The mayor had been seeking extensions to the Docklands Light Railway and Bakerloo Underground line, along with powers to introduce a tourist levy and a substantial increase in funding for the Metropolitan Police, but his office now expects none of these will be approved.

A source close to Sir Sadiq said ministers ‘must not return to the damaging, anti-London approach of the last government’, adding this would harm both London’s public services and ‘jobs and growth across the country’.

They said: ‘Sadiq will always stand up for London and has been clear it would be unacceptable if there are no major infrastructure projects for London announced in the spending review and the Met doesn’t get the funding it needs.

‘We need backing for London as a global city that’s pro-business, safe and well-connected.’

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