Chancellor says spending review will make "working people better off"
Rachel Reeves is set to outline the budgets for Government departments later
Last updated 11th Jun 2025
The Chancellor will deliver her spending review in the Commons later which will outline the day-to-day spending plans for the next three years and capital spending for the next four.
It's likely to see boosts for the NHS, defence and schools, but is also expected to involve squeezes for other departments as Rachel Reeves aims to stay within the fiscal rules she has set for herself.
Her room for manoeuvre has also been further constrained by the Government’s U-turn on winter fuel payments, which will see the benefit paid to pensioners receiving up to £35,000 per year at a cost of around £1.25 billion to the Treasury.
Arguing that the Government is “renewing Britain”, she will acknowledge that “too many people in too many parts of the country are yet to feel it”.
She will say: “This Government’s task – my task – and the purpose of this spending review is to change that, to ensure that renewal is felt in people’s everyday lives, their jobs, their communities.”
What are we expecting in the spending review?
The full details of her plans will be revealed in the Commons at lunchtime but a several announcements have already been made, they include:
- £15.6 billion for public transport projects in England's city regions
- £16.7 billion for nuclear power projects, including £14.2 billion for the new Sizewell C power plant in Suffolk
- £39 billion over the next 10 years to build affordable and social housing
- An extension of the £3 bus fare cap until March 2027
- £445 million for upgrades to Welsh railways
The Chancellor is also expected to announce changes to the Treasury’s “green book” rules that govern whether major projects are approved.
The Government hopes that changing the green book will make it easier to invest in areas outside London and the South East.
The Institute for Fiscal Studies has already warned that any increase in NHS funding above 2.5% is likely to mean real-terms cuts for other departments, or further tax rises to come in the budget this autumn.
This could mean a budgetary squeeze for areas such as local government, the justice system and the Home Office, despite reports that policing would receive an above-inflation settlement.
The Chancellor has already insisted that her fiscal rules remain in place, along with Labour’s manifesto commitment not to increase income tax, national insurance or VAT.
She will say on Wednesday: “I have made my choices. In place of chaos, I choose stability. In place of decline, I choose investment. In place of retreat, I choose national renewal.
“These are my choices. These are this Government’s choices. These are the British people’s choices.”