Spending Review - 11th June 2025
11 June 2025

Chancellor Rachel Reeves MP has set out her spending review in the House of Commons this afternoon. It outlines how much funding individual government departments will receive over the next three years and state infrastructure investment for the next four years. The Chancellor said the government’s priorities are health, security and the economy.

The last spending review took place during the COVID-19 pandemic, and before that, in 2015.

The Chancellor labelled the review as: “we are renewing Britain. In place of chaos, I choose stability, in place of decline, I choose investment. I choose national renewal.” She stated it was a zero-based review with a line-by-line assessment on what the government spends and she is raising the cash from driving out inefficiencies and selling off government land and buildings and from ending the loophole on VAT on private school fees.

Managing Partner, Tony Bullock’s reaction: “This is ludicrous, huge spending pledges with no way of paying for it. It’s a spend now and tax later spending review and it’s very worrying. We will have a summer of speculation as we await the Autumn Budget and we must be in no doubt that taxes will have to increase to pay for this.

“Simply, there are two options to pay for all of this, either increase the national debt or come the Autumn we have to expect huge tax increases.

“This may look like great news for those benefitting from the spending, but it is not good news for the taxpayer in the coming months. The only way to pay for this is increasing taxes. Just selling off a few government buildings, will be a drop in the ocean in terms of paying for this. The burden will fall on us, businesses and individuals.”

Set against a very challenging economic backdrop, here’s an overview of the spending announcements:

• Government department budgets to grow by 2.3% per year in real terms.
• Committed more than £14bn to build the Sizewell C nuclear power station.
• Over £2.5bn to be invested in nuclear fusion.
• £500m grant confirmed for Tata Steel in Port Talbot.
• Pledged investment of £15.6bn in regional transport projects outside of London.
• Cuts to winter fuel have been reversed with around nine million pensioners now set to receive the payment.
• £11bn increase in defence spending and a £600m uplift for security and intelligence agencies. Defence spending will increase to 2.6% of GDP by April 2027.
• £280m more per year to be spent on new Border Security Command – and a pledge to end the use of costly hotels to house asylum seekers in this parliament.
• £2bn to be invested in the government’s Artificial Intelligence Action Plan.
• £39bn cash injection into social and affordable house building.
• The NHS sees a funding boost of £29bn per year for the day-to-day running of the health service - a 3% rise for each year until the next election.
• £1.2 billion for training and upskilling.
• Investment of £7bn to fund 14,000 new prison places. And £700m per year into reform of the probation service.
• £3 bus fare cap extended until at least March 2027.
• £370m to be spent on school-based nurseries. Nearly £2.3bn per year to fix crumbling classrooms and £2.4bn per year for rebuilding 500 schools – and an uplift in schools core budgets.
• Expansion of free school meals and capping the cost of school uniforms.
• £55m for children’s social care.
• Police spending power will increase by an average of 2.3% per year with more than £2bn to help put 13,00 extra police officers and PCSOs on the streets.

Back to Blog Articles