Rachel Reeves delays Whitehall budget announcement until June

In the United Kingdom, plans for the next Whitehall budget have encountered delays, with Rachel Reeves expected to finalize and announce funding details for government departments by June 2025. This decision arises from complex negotiations that are anticipated to take about six months, as officials engage with various cabinet ministers. Initially, the chancellor stated that the spending review would be revealed in the spring, but as discussions progressed, it became apparent that a more intricate review process was necessary. Although officials have claimed that the schedule remains on track for a late spring release, insiders suggest that the substantive negotiations could extend into early summer, highlighting the challenges that lie ahead. Previously, Reeves had announced a one-year spending review providing departments a budget plan extending until the fiscal year 2025-26. This review yielded significant budget increases for certain sectors, particularly health, which secured an additional £25 billion over the coming two years, representing a 3.8% increase above inflation. Conversely, other departments, such as the Home Office and the Department for Transport, faced substantial budget cuts of 2.7% and 2.5%, respectively, leading to discontent among several cabinet ministers. Protests were directed toward Keir Starmer concerning these cuts, particularly regarding a mandate for up to 10% reductions in capital spending. The process of agreeing on this one-year spending review was marked by tension among ministers, underscoring the reluctance to implement budget reductions. Experts indicate that the forthcoming spending review, which will set future budgets until 2029, is expected to be even more contentious as it will determine funding levels for unprotected departments. Current Treasury predictions estimate that day-to-day spending will rise by an average of 1.5% over inflation; however, most of this funding will likely be allocated to 'protected' sectors, intensifying the financial constraints faced by departments like local government and border control. The Office for Budget Responsibility has forecasted cuts of 1.3% to unprotected departments from 2025-26 to 2028-29. Observers have expressed concerns that such reductions could exacerbate existing strains on public services, which are already under pressure and may struggle to cope with further financial limitations as the next general election approaches. This complex budgeting landscape highlights the challenging balance the government must strike between fiscal responsibility and adequate provision of essential public services.