The UK Treasury’s multiyear spending review has been postponed until June 2025, marking a significant delay from the initially planned spring announcement. Chancellor Rachel Reeves’s decision extends the period of fiscal uncertainty for government departments across Whitehall.
Sources close to the Treasury reveal the schedule shift comes as ministers grapple with complex funding priorities and departmental negotiations. The revised timeline places the review almost a year after Labour’s anticipated election victory in July 2024, considerably later than the original April target.
The spending review, a crucial mechanism for allocating funds between government departments, follows Reeves’s October Budget, which implemented a £40 billion tax-raising package. While this earlier measure provided immediate funding boosts to public services, the delayed review will determine the longer-term winners and losers in departmental spending beyond 2025-26.
The Treasury faces mounting pressure as public finances show strain, with borrowing reaching £96.6 billion in the first seven months of the current fiscal year. This figure exceeds the previous year’s borrowing by £1.1 billion, representing the third-highest level since monthly records began.
The Office for Budget Responsibility’s forthcoming economic forecasts could present additional challenges for the Treasury if they indicate potential breaches of Reeves’s newly established fiscal rules. The chancellor’s commitment to avoiding further significant tax increases may face scrutiny as borrowing costs continue to rise.
The delayed review will encompass three years of day-to-day spending allocations alongside five-year capital budgets, presenting a comprehensive framework for public service investment across health, education, defence, and asylum sectors. This extended timeline suggests a more thorough evaluation of competing demands within the constraints of Labour’s fiscal strategy.
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