The U. K. Chancellor Rachel Reeves has unveiled a significant spending plan. This plan will guide how billions of pounds will be allocated across different government departments and infrastructure projects. The focus is on "protected" departments like health and defense, which are set to receive substantial funding increases. However, some "unprotected" departments, such as the Home Office and those overseeing local government and the environment, might face budget cuts as the government aims to reduce costs.

The spending review covers two main areas: day-to-day running costs for the next three years and capital expenditure for the next four years. This includes investments in infrastructure and public services, such as new roads, hospitals, and military equipment. The Treasury has indicated that day-to-day spending will increase by an average of 1. 2% per year, while investment spending will rise by 1. 3% annually. This modest increase means that tough decisions will have to be made.

Defense spending is a key area of focus. The government has already planned to increase defense spending from 2. 3% to 2. 5% of GDP by 2027. However, Reeves announced an even higher target of 2. 6% by April 2027. This boost will fund new nuclear-powered submarines, drone manufacturing, and cyber warfare capabilities. The increase in defense spending is partly funded by cuts to the overseas aid budget, which has raised some eyebrows.

Healthcare is another major recipient of funding. Reeves described the investment as "a record cash injection" for the National Health Service (NHS). This means an extra £29 billion per year for the day-to-day running of the NHS, with a 3% annual increase in real-terms spending. This boost is crucial for a healthcare system that has been under significant strain.

Science and technology are also set to benefit. The Treasury has allocated £86 billion over the next four years for research and development in these fields. This investment aims to drive growth and innovation, covering everything from new drug treatments to advancements in artificial intelligence.

Housing is another area of concern. Reeves announced a £39 billion boost for social and affordable housing. This is a big deal for many voters who struggle to find affordable places to live. The investment will help increase the availability of state-subsidized social housing and low-cost new homes.

Education will see some changes too. Free school meals will be expanded to more than 500, 000 children whose parents receive Universal Credit. This welfare payment is available to those on low incomes, unemployed, or unable to work. Previously, eligibility was more restricted, especially outside of London.

Justice and policing will also receive a significant boost. Reeves announced a £7 billion investment to fund 14, 000 new prison places and £700 million per year for probation system reform. Police spending power will increase by an average of 2. 3% per year, adding more than £2 billion over the next few years. Additionally, 13, 000 new police officers and support staff will be hired across England and Wales.

Transport networks outside of London will get a £15. 6 billion funding boost, with a focus on the North and Midlands. London's Transport for London network will also receive a four-year settlement to ensure stability and future planning. Local transport grants will see a fourfold increase by 2029.

Nuclear energy is another area of investment. The government plans to spend just over £14 billion on building the Sizewell C nuclear power station and £2. 5 billion on smaller modular reactors. This move is expected to create 10, 000 jobs and provide clean power to millions of homes, helping to cut energy bills and boost energy security.

Where Will the Big Bucks Go? A Look at the U. K. 's Spending Plan

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