Spending Review 2025 - A quick summary

The review sets the day-to-day budgets of government departments over the next three years, used to pay staff and deliver public services.

The review is perhaps lacking in terms of support for the voluntary, community, faith and social enterprise (VCFSE) sector at a time of significant financial pressures due to rising costs, falling income and increasing demand. NCVO has said that the Chancellor’s Spending Review “falls short of delivering the stability charities need to support communities through tough times”.

Some key points:

Local government finance:

• The government say they are taking action to return local government to a sustainable financial position. There will be a real terms increase in local authority core spending power of 3.1% across the Spending Review period.
• The Government has allocated £100 million forearly intervention and £950 million capital for temporary accommodation throughthe Local Authority Housing Fund.

Local growth and place:

Targeted Local Investment (these have been framed by Government as the successors to UKSPF)

• Up to 350 deprived communities across the UK will receive funding for regeneration, community cohesion, and public realm improvements.
• The establishment of a Growth Mission Fund will invest £240 million of capital from 2026-27 to 2029-30 in projects that enable local job creation and the economic regeneration of local communities.  
• 25 trailblazer neighbourhoods will receive up to £20 million over the next decade, including Brinnington Stockport, Benchill South and Wythenshawe Central, Manchester, Pendleton Salford

Health:

• NHS Investment: £29 billion real-terms increase in annual NHS day-to-day spending from 2023–24 to 2028–29, reaching £226 billion by 2028–29.
• Digital Transformation: Up to £10 billion investment in NHS technology and digital transformation, including a single patient record and enhanced NHS App functionality.
• Prevention Focus: shift from treatment to prevention and hospital to community care.
• Productivity Goals: NHS to deliver 2% productivity growth annually, unlocking £17 billion in savings over three years to be reinvested in care.

Public Sector Reform:

• The £3.25 billion Public Service Transformation Fund will drive reform by investing in digital technology, AI, and preventative services across health, education, justice, and local government - aiming to modernise delivery, improve outcomes, and boost productivity.

Work and employment support:

• Employment Support: Over £3.5 billion by 2028–29 to tackle economic inactivity and support people into better jobs.
• Youth and Inactivity Trailblazers: Continued funding for pilot programmes to support young people and inactive adults.
• Connect to Work: National rollout of supported employment for disabled people and those with complex barriers.

Welfare:

• Expansion of Free School Meals to all children in England with a parent receiving Universal Credit.
• Winter Fuel Payment means test introduced (threshold: £35,000).

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GM VCFSE Leadership Group members and CEO of We Are Survivors, Duncan Craig, has written a helpful summary of key figures from the full review, including housing, transport, tech, defense and more:

• £29 billion funding boost to NHS
• New investment includes up to £10 billion on technology and digital transformation, GP training to deliver millions more appointments and rolling out mental health support to all schools.
• £11 billion ‘real terms increase’ in defence spending
• £15 billion for nuclear warhead
• £7 billion of infrastructure renewal of military accommodation
• £6 billion for munitions
• £280m a year invested into border security by 2028-29
• £400m a year by 2028-29 to speed up the process of asylum processing
• Police spending power up 2.3% to put an additional 13,000 police officers, PCSOs and special constables into neighbourhood roles
• £15.6 billion funding in total by 2031-32 for local transport projects in England’s city regions
• £2.3 billion from 2026-27 to 2029-30 for local transport improvements outside of these nine regions
• A further £2.5 billion to connect Oxford and Cambridge through the continued delivery of East-West Rail and confirmed she will set out plans to take forward work on Northern Powerhouse Rail in the coming weeks.
• Upgrades to Cardiff Central station
• Reduce journey times between Manchester and Leeds through continued investment in the TransPennine Route Upgrade
• Progress the delivery of Midlands Rail Hub, enhancing connections from Birmingham across the West Midlands and to other regions.
• £39 billion of investment over ten years through a new Affordable Homes Programme, turbocharging the Plan for Change commitment to get the country building and deliver the 1.5 million homes Britain needs.
• £14.2bn for Britain’s first state-funded nuclear power station since 1988 in Sizewell C, providing over £2.5bn for one of Europe’s first Small Modular Reactor programmes and allocating £9.4bn to UK carbon capture and storage over the Spending Review period
• Additional funding for up to 350 communities, especially those in deprived areas, through Plans for Neighbourhoods
• The Government will also establish a Growth Mission Fund to expedite local projects that are important for growth but have been forgotten, such as Southport Pier, Kirkcaldy’s seafront and High Street, and a new sports quarter in Peterborough.
• The Charity Commission is set to receive an £8m bump to its annual budget next year.