Unlocking the Future: Key Takeaways from the 2023 UK Spending Review

Chancellor Rachel Reeves has presented a groundbreaking multi-year spending review that will shape the UK’s fiscal landscape for the next three years, marking the first comprehensive analysis since 2021. Below are the critical elements of this review that promises to impact various sectors across the nation.

Health Sector Highlights:

  • The NHS in England will see a 3% rise in its day-to-day budget annually, amounting to £226 billion by 2029, adjusted for inflation.

  • Investment budgets will remain steady, with up to £10 billion allocated for advancements in technology, such as improving the NHS App and establishing single patient records.

  • The health department must achieve roughly £9 billion in efficiency gains by 2029, contributing to a broader target of £13.8 billion government-wide.

Education Funding Changes:

  • The core schools budget in England is set for a modest increase of 0.4% in real terms, expected to reach £69.5 billion by 2029.

  • Free school meals will expand to include around 500,000 additional children, costing approximately £490 million annually from September 2026.

Budget Allocations by Departments:

  • Home Office: Facing a 1.7% cut in day-to-day spending. Government aims to curtail costs related to asylum seekers’ hotel accommodations.

  • Ministry of Justice: Average day-to-day increases of 1.8%, but investment funding will decrease by 2.1%.

  • Ministry of Defence: Daily budget will rise by 0.7%, with a significant 7.3% boost in investment spending, reflecting the government’s commitment to escalate defence spending from 2.3% to 2.5% of GDP by 2027.

  • Ministry of Housing: Anticipates a 1.4% reduction in day-to-day funding, while £39 billion is earmarked for social housing over a decade.

  • Transport: Day-to-day budget will decrease by 5%, justified by projected savings from nationalisation of private train companies, alongside a £15.6 billion allocation for non-London transport projects.

  • Energy Security: Budgets will rise by 0.5% for daily expenses and 2.6% for investments, including an additional £11.5 billion for the Sizewell C nuclear power plant.

  • Foreign Office: A stark cut of 6.8%, linked largely to reduced overseas aid spending.

  • Department for Science, Innovation and Technology: This department is a winner, with average daily spending expected to surge by 7.4% and £2 billion devoted towards an AI opportunities action plan.

Additionally, funding boosts in England will correspond with an additional £5.7 billion annually for Scotland, Wales, and Northern Ireland over the same period. This review sets the stage for significant policy shifts and budgetary strategies that could change the fabric of public services across the UK.

Samuel wycliffe