Decisions, decisions: Who looks set to be the winners and losers of Reeves’ upcoming Spending Review?

It’s crunch time for Rachel Reeves as the countdown for her hotly anticipated Spending Review is well and truly underway. In just under two weeks, Reeves will deliver her first multi-year spending review settlement as Chancellor, and the first from a Labour government since the 2000s. No pressure, Rachel. 

Safe to say, some Ministers will be more pleased than others when the Spending Review is finally delivered on 11 June, with Health and Defence expected to come out pretty good, but with real-term cuts on the horizon for the Home Office, Energy, and Housing. 

The Home Office has already been informed that the Metropolitan Police should expect a £260m shortfall and to have to lose 1,700 officers, community support officers and support staff. 

As one police source put it, “Police forces are facing budget cuts already. To add to this will mean halting any progress made on some of the government’s key policies, including halving knife crime and halving violence against women and girls”. They continued, “There has been some good progress on [violence against women and girls]. But, realistically, more deep cuts would put that progress in jeopardy.”

Reeves faces further hostility from Housing Secretary, Angela Rayner, over funding for social housing. The Chancellor previously said housing will be one of the key beneficiaries of the £113bn in capital spending, which the government will begin to set out at the spending review, but much to Rayner’s disapproval, did not specify social homes.

The Treasury has allocated £2bn towards affordable housing to cover the gap between the end of the current programme, which concludes in 2026, and a new initiative expected to be outlined in the upcoming review.

At the time of the announcement, the £2bn was referred to as a “downpayment” on a broader funding package to be detailed later, which Reeves suggested would represent a significant turning point in the development of council housing. However, it is understood that Rayner is unhappy with the proposed funding levels for the next stage of the scheme.

Add Energy Secretary, Ed Miliband, to the list of aggrieved ministers. Though his department looks set to get significant capital investment in energy infrastructure, including nuclear, reports indicate that he is fighting hard to secure funds for insulation. Indeed, Labour had previously doubled the earlier government’s warm homes scheme from £6bn to £13.2bn over this parliament. But rumours are now swirling that this decision will be overturned. 

Further reports suggest that 50,000 civil service jobs are set to be cut across several departments, which would constitute a 10 per cent cut in civil servant numbers, dwindling its workforce down to 450,000. 

But a Minister whose bad books Reeves may not be in is Employment Minister, Alison McGovern. Reports are now circulating that Sir Keir Starmer is seriously considering relaxing the benefit reforms introduced in March to ensure more people are eligible for Personal Independence Payments, meaning benefit claimants could be given longer transitional periods to seek out other benefits if they lose out as a result of the reforms. 

Commenting on the reforms in a recent interview, McGovern said, “I don’t blame anybody for being scared or worried about it because given what’s happened with changes to disability benefits before, I understand that”. 

In making this decision, the looming threat of a hefty backbench rebellion will no doubt be at the forefront of the Labour Leader’s thinking, given reports that up to 100 MPs could oppose the measures when they come to a vote. 

While it may be impossible to please everyone, Reeves will be conscious not to ruffle too many feathers when she finally unveils her Spending Review next month. Of course, she’ll be laser-focused on meeting the government’s core missions and sticking to her self-imposed fiscal rules. But of major importance also is the need to keep her Ministers on side, and the backbenches at bay.