techUK news and views
26 Nov 2024

Inform techUK policy thinking: Spending Review 2025

Inform techUK's thinking for the UK Government's Spending Review in Spring 2025. Below, we outline the process for members to feed in and inform our policy work.

First, what is a Spending Review?

Spending reviews in the UK are a process by which the Government assesses its public expenditure to allocate and set out public spending plans for Government departments.

Managed by HM Treasury, it typically covers a multi-year period, offering a framework for budgetary planning and implementation. The review aims to align spending with Government priorities, promote efficiency, and ensure fiscal sustainability.

Current (operational) and capital (infrastructure) spending are both reviewed to balance immediate needs and long-term investments. The Spending Review also addresses broader fiscal challenges, including managing public debt and ensuring value for money.

What do we already know from Phase 1 of the Government's Spending Review?

Announced in the most recent Autumn Budget, was an update to the fiscal rules, including an updated Charter for Budget Responsibility, which aims to implement a more stable and transparent framework. This will require spending reviews to be held every two calendar years, and with a minimum duration of three years of the five-year forecast period to ensure public services are always planned over the medium term. The aim is to improve value for money, the planning of public expenditure and provide greater budgetary certainty.

We saw phase 1 of the Spending Review 2025 take place alongside the most recent Autumn Budget on 30 October. A reminder of the key Budget announcements relevant the tech sector can be found via our insight.

Through Phase 1, the Government reset public spending for 2024-25 and set departmental budgets for 2025-26.

Day-to-day spending limits will increase by £33 billion between 2024/25 and 2025/26. Investment spending (officially, ‘capital DEL’) will increase by £14.7 billion between 2024/25 and 2025/26.

For day-to-day spending, the Department for Health and Social Care accounted for around a third of this increase, with the Department for Education accounting for a further 13%. The Scottish Government and the Ministry for Housing, Communities and Local Government (MHCLG) local government budget each account for a further 5%.

A few departments received decreases in their spending limits between 2023/24 and 2024/25 - for example, the Department for Transport.

What to expect from Phase 2 of the Spending Review

The Government have outlined that they will use the Spending Review to deliver a new mission-led, technology-enabled, and reform-driven settlement for public services.

The Spending Review will set spending plans for a minimum of three years of the five-year forecast period and will conclude in late Spring 2025.

The Spending Review will hope to restore spending control in the medium term, setting spending policy in line with the Government’s wider fiscal strategy.

There will be a role of the ‘Office for Value for Money’, a time-limited multidisciplinary team, based in the Treasury who will take a ‘task and finish’ approach to its activities. Following the conclusion of the Spending Review next year, the Office will evaluate the effectiveness of systems reforms, and its impact on the wider spending architecture.

Attend member drop-in sessions:

techUK are continuing our policy work to inform our submission into HM Treasury. To ensure that our policy recommendations are robust and member led, members can attend our drop-in calls. 

These are open to all members and provide a chance for members to feed in directly. They will take place on:

  • Friday 6 December, 11:00 – 12:00. Sign up via the link.
  • Wednesday 8 January, 11:00 – 12:00. 

Send us your thoughts directly:

Or, should members want to reach out directly via email, you can do so to Neil, Samiah or Mia.

techUK look forward to continuing to work with our members and the Government to ensure that the Spending Review leverages the role of the tech sector and digitisation to achieve growth across all regions of the UK.

Neil Ross

Neil Ross

Associate Director, Policy, techUK

Samiah Anderson

Samiah Anderson

Head of Digital Economy, techUK

Mia Haffety

Mia Haffety

Policy Manager - Digital Economy, techUK

 

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