The Chancellor of the Exchequer, Rachel Reeves, has initiated a second phase of the Government’s Spending Review, focusing on a detailed evaluation of public sector spending. With the Prime Minister’s Plan for Change at its core, this initiative promises to reform public services, eliminate waste, and ensure that every pound spent delivers value for money for the British public.[1]
What is the Government’s new approach to spending in the 2025 Spending Review?
This review will introduce a ‘zero-based’ approach to budgeting, the first of its kind in over 17 years. Each government department will be required to reassess their budgets line by line, ensuring that spending aligns with national priorities. The review will focus on areas including economic growth, the NHS, public safety, clean energy, education, and national security.
The Chancellor explained that the approach is designed to ensure that public money is allocated to areas where it can have the greatest impact, stating, ‘we are committed to ensuring that taxpayer funds are used efficiently, and that the focus is on delivering services that matter to people’.[2]
How will independent experts help scrutinise Government spending in the Review?
To support this process, government departments will be overseen by external panels of experts from various sectors, including finance, academia, and local government. These panels will provide independent evaluations of spending to ensure that resources are being used effectively and that any areas of waste are identified.
Additionally, departments have been advised to halt spending that does not align with the Government’s priorities. The Chief Secretary to the Treasury has communicated that difficult decisions may be required in order to ensure that resources are focused where they are most needed.[3]
What are the key public service reforms and innovations announced by the Chancellor?
Alongside the Spending Review, the government has also announced a £100 million initiative aimed at reforming public services. The plan involves the creation of test-and-learn teams to explore new approaches to public service delivery. These teams will have the flexibility to experiment with new ideas in order to improve efficiency and address ongoing challenges in public service provision.
How is the Government addressing public sector financial challenges through the spending review?
The review comes at a time of significant financial and operational challenges for the public sector, including a large budget deficit and concerns about the effectiveness of some existing programs. For example, a recent evaluation of the £6.5 million Social Workers in Schools programme found no evidence that it improved social care outcomes[4], highlighting the importance of evidence-based decision-making in public spending.
The Chancellor acknowledged that the process may require difficult decisions but emphasised the importance of ensuring that government spending is both efficient and aligned with long-term national goals.[5]
What does the 2024 Spending Review mean for the future of public spending in the UK?
The Spending Review is a key part of the Government’s broader strategy to improve public services, control public finances, and ensure that taxpayer money is spent effectively. With input from experts across various sectors, the review is intended to create a more transparent and accountable approach to government expenditure.
How do I submit a representation to the Spending Review?
An online portal has been launched to give businesses the opportunity to put forward policy proposals for the Spending Review, including on how government can deliver public services more efficiently or effectively. These representations will be collated and shared with departments for consideration in their submissions, , further promoting collaboration between the public and private sectors.[6]
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[1] HM Treasury, Chancellor: Every pound spent will deliver Plan for Change, 12 December 2024, Link
[2] HM Treasury, Chancellor: Every pound spent will deliver Plan for Change, 12 December 2024, Link
[3] HM Treasury, Chancellor: Every pound spent will deliver Plan for Change, 12 December 2024, Link
[4] Community Care, No evidence scheme placing social workers in schools reduces need for social care, says What Works, 30 March 2023, Link
[5] Reuters, UK finance minister Reeves vows to keep taking difficult decisions, 17 January 2025, Link
[6] HM Treasury, Chancellor: Every pound spent will deliver Plan for Change, 12 December 2024, Link
