Home Industry 'It's going to be ugly': Westminster braces for Spending Review

'It's going to be ugly': Westminster braces for Spending Review

by David

There is a joke, of sorts, doing the rounds in Whitehall, that soon government will be "the NHS and the army with the rest just bolted on".

For ministers fighting to keep cash to spend in their departments it's not that funny. In a couple of weeks, the Chancellor Rachel Reeves will reveal what an insider described as "the last big set of decisions" before the next general election.

It's an open secret in Westminster billions will be found for health and defence. But the chancellor and her deputy, Darren Jones, are locked in conversations with Cabinet ministers about setting all government budgets all the way to 2029.

Forget rows over winter fuel or welfare payments, the Spending Review sets the terms for everything. Much more than spats over spreadsheets, it's a series of arguments about who and what the government is for.

Who wins and who loses will set the political terrain for years to come. I've talked to nearly 20 ministers, advisers, and insiders about what's going on behind closed doors.

"It's going to be ugly," observes a Whitehall source. In case you've been living on Mars, ministers have said, again and again, government has to "live within its means", and "there'll be difficult decisions".

That's all code for saying some bits of government spending will be hacked back. The paradox is that overall, the government is spending more – big tax rises in the autumn meant hefty cheques for public services.

And the chancellor also changed the rules on how much she can borrow to spend on long term projects, what's known as "capital spending", giving her more than £100bn to dole out this time round.

But because some kinds of spending – like health or defence – are getting significant extra cash, there's a tight squeeze on day-to-day spending more or less everywhere else. Despite the vast budgets, one government source admits, "there are services in real danger".

Who, or what then, are the likely winners and losers? By late Friday more than half of government departments had reached a final agreement with the Treasury.

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