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Two halves Winners and losers in Labour spending review

The Guardian

|

June 12, 2025

For most government departments, the spending review has been a game of two halves.

- Jessica Elgot

Two halves Winners and losers in Labour spending review

There are huge boosts to capital spending but on projects that will take a long time to build. And on day-to-day spending there is a big squeeze on most departments. So who has come out on top?

Health In pure numbers, health is the biggest winner of the spending review. Wes Streeting's department will get almost £30bn extra a year for its budget, a rise of 3% for the NHS. Of that, £10bn will be allocated overall for technology and digital transformation.

In comparison with numbers that other cabinet colleagues are facing, it might sound churlish for Streeting to grumble. The Institute for Fiscal Studies suggests his budget rise is about 60% of the cash increase in the overall day-to-day spending envelope. But it is lower than previous spending reviews, well below the average of 3.6% and much lower than increases under the last Labour government.

Success rating: 7/10 Defence One of the key priorities of the review was a big rise in the defence budget and it was one we knew was coming because of pledges in the strategic defence review to get spending to 2.6% of GDP by 2027, though that includes funding for the intelligence services.

But there is considerable pressure to go further with little idea of how to do so. The UK is expected to agree a further rise to 3.5% by the mid-2030s at the Nato summit later this month. Little of what was set out in this review suggests how that will be met.

The cash set out in the review will mean £11bn for defence and £600m extra for security services, funded by big cuts to international aid, which is reflected in a massive cut to the Foreign Office's day-to-day spending.

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