What is the spending review?
A spending review is the process in which HM Treasury sets the budgets for each government department for several years ahead. It decides how much goes to the NHS, schools, defence, police and other services. The most recent full review, in June 2025, set day-to-day budgets up to 2028/29.
The Budget mostly decides taxes and the overall size of spending. The spending review then divides that total between departments. Each department bids for money, and the Treasury negotiates with ministers. The final settlement is announced to Parliament by the Chancellor. Spending reviews cover day-to-day budgets, such as staff and running costs, and capital budgets for investment like buildings and equipment. They usually include plans to save money and improve productivity.
The June 2025 review set day-to-day budgets for 2026/27 to 2028/29 and capital budgets up to 2029/30. Health received the largest increase. The government has said it intends to hold full reviews every two years, so departments can plan with more certainty. Defence also received extra money, while some unprotected departments faced tight settlements.
Spending reviews matter because they lock in priorities for years. Settlements below inflation can mean real cuts, even when cash budgets rise. The devolved governments in Scotland, Wales and Northern Ireland also find out their block grants. These change in line with spending on similar services in England. Parliament later approves the actual money through annual Estimates, which allow each department to spend.
- Sets taxes in the Budget
- Agrees each department's spending
- Manages government borrowing
- Oversees banks and financial regulation
- Sets fiscal rules
Budget: Under £1bn for the department itself, but it decides how about £1.3 trillion of public money is spent. Staff: About 2,000
What it runs or funds
HM Revenue and Customs, UK Debt Management Office, Office for Budget Responsibility (independent), National Savings and Investments, Royal Mint
Did you know? Officially the PM is First Lord of the Treasury, which is why No 10 has that title on its letterbox.
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What is the difference between a Budget and a spending review?
The Budget mainly sets taxes and overall borrowing. The spending review splits spending between departments over several years.
When was the last spending review?
The last full review was announced on 11 June 2025.
Who decides the spending review?
The Chancellor and the Treasury, after negotiating with each department, with the Prime Minister's backing.
What is HM Treasury?
The UK's finance ministry. The Treasury is the UK's finance ministry, controlling spending, taxes and borrowing.
Which minister leads the Treasury day to day?
The Chancellor of the Exchequer. The Chancellor of the Exchequer leads the Treasury.