The Spending Review dominated my day yesterday, and I went out for a long walk last night to forget all about it.
Most of the country will want to do the same. As the FT notes, in current spending terms, the NHS was the big winner:
There are notable losers. Overall, there is a spending increase, but nothing changes the overall relationship between the government and the economy. And note that the 3% increase in NHS spending is less than the 3.6% long-term trend required to meet increased demand for more expensive services that healthcare can deliver, and which people expect. There will be no win for Labour as a result.
On investment, defence got the money, and it has the worst multiplier effects:
And then note this. The aim is to increase UK defence spending to 2.6% of GDP (in itself, a meaningless ratio as it in no way indicates defence adequacy):
That is a long way from what is being demanded by NATO and the USA. Again, no one is going to be happy with Labour, but then, no one ever is these days.
My suspicion is that this plan will now be filed and then quietly forgotten as events overtake it.
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What I dont hear anything about is how much needs to be spent simply to keep the existing ‘public realm’ – schools, roads, hospitals etc ‘in good repair’ because we certainly are not spending anything like enough at the moment.
Oh and of course Typo! Soending
Typo corrected
But there was no money to keep things in good repair
Hospitals that are falling down will collpase soon
This is precisely the point I’ve been making – what sort of civilisation creates civil engineering, infrastructure, drains, roads, bridges, buildings, public services, clean water but then all of a sudden ‘discovers’ that there is no money for their upkeep?
Nah! I’m not having it. This is the sort of absurdity that Thomas Hobbes and Samuel Beckett have spoken about.
The cause of this having to live in this absurdity? The sequestration of the nation’s money supply by the rich. Greed. They want it all and it seems to be going their way.
You are right
Wonderful typo in your heading! A “Soending Review” presumably because our reaction to it is ‘”So ends” any hope of improvement’?
Corrected now…feeling dozy his morning
Well, the Daily Mail called it a “reckless spending splurge”, so god knows what they would say if Labour spent what they actually need to. It’s a great illustration of who really runs this country though.
A trick that could be used to look like the defence budget has been massively increased, is by including some of the indirect costs that defence has, such as fixing roads (can’t move troops around effectively otherwise), fixing up schools (can’t get educated soldiers to fly drones otherwise), fixing up hospitals (can’t get wounded troops back to the front line otherwise), housing (troops need to feel they have a decent roof over their family’s heads).
Could easily wangle the defence budget to look like 10% of GDP, putting even Poland to shame.
Are you a management accountant? 🙂
Ha ha, funny Richard – laughed out loudly at “management consultant”, totally brilliant!!!!
Weird.
I’ve just been reading about a village called Sheriff Hutton, north east of York and a mile or two away from Strensall Barracks.
The road was resurfaced a few weeks ago. Now Yorkshire water has dug it up again for repairs. Who should pay for all that? Hope it’s not the council.
You were right about the bunk “millionaires fleeing the UK” narrative by the way. If you’ve not seen: https://bylinetimes.com/2025/06/10/the-millionaire-exodus-the-uk-media-told-you-about-never-actually-happened/
I have seen it.
The finding shows that the so called exodus is virtually, or actually, non-existent.
It’s just a few people buying places in the sun, somthing I have never undcerstood.
They have it too good here.
There’s a zoom meeting on Monday at 6.30, organised by Arise, I think, with Richard Burgon. There’s also someone from Patriotic Millionaires on. I’ve often wondered who belongs to that group. Might find out.
Those commentators who always talk about ‘throwing money’ at the NHS – have studiously avoided asking why we are throwing money at grotesque white elephant dinosurs like Sizewell, SMR’s Carbon Caputre – nuclear subs and bombs –
That’s what ought to be remembered – that this trumpeting of ‘capital investment’ – utterly wasted on boosting military industrial complex – and leaving future generations to pick up the pieces
I wondered how buying missiles could be called ‘investment’ by Reeves yesterday.
By defintion, don’t we hope they are wasted?
I’m sure it will be a comfort to any Palestinian whose family is blown to pieces by high-tech munitions that they are at least supporting highly paid skilled workers in the UK, and massaging our GDP figures.
Thank you, Tom.
This adds to our complicity: https://www.thenational.scot/news/25233113.uk-currently-training-israel-soldiers-uk-soil-labour-admit/.
Mel Stride is going round saying “the spend today, tax tomorrow Chancellor”.
Er, yes, Mel. That’s how it works and has done since 1694.
Indeed….
Yes, that Mel Stride had me doing a lot of expostulating at the television. What a buffoon!
And why is Rachel from Accounts professing to be disappointed at our lack of growth? I thought she’d been doing everything in her power to abolish our growth
Polly Toynbee seems to think the £39bn means 300k new houses per year.
Oh dear…
She is wrong, of course, even with gearing
39bn, 300k houses …. That’s 130k per house, right?
we have a housing crisis. Imagine a government could compulsorily purchase land that reflects its existing value (not inflated because it has planning permission, etc). Those are the government’s to give.
Imagine that methods would be employed to gain from scale benefits and off-site manufacturing (not making things up ad hoc on site). Imagine that excess profits from builders were not spaffed away (to misquote a former PM) …..
Much as I like to criticise Toynbee, A bit of planning and engineering things properly (not as a way of diverting public money) …. 130k might not be very far away ?
She is assuming a lot of additional borrowing…
She is a journalist. We expect them to get the facts right before printing anything praising the glorious leader.
Her piece in the guardian is almost akin to Soviet-era propaganda.
She only failed to mention a 5-year plan.
Out of interest, is there, or if not what do we think would be, a reasonably rigorous, quantitative, definition of austerity? Perhaps failing to continue to at least match expenditure to expected changes in costs (e.g. due to inflation) and demand (e.g. due to demographic change)? Or perhaps we should modify that to allow for reasonably expected changes to productivity (e.g. due to technological innovation), so austerity would then become failing to continue to at least match reasonably productivity-adjusted expenditure to expected changes in cost and demand? If so, what would expected changes in expenditure look like for different parts of the public sector, do we think?
I need to work on this….
Nigel
Here is my take.
What you describe are the more operational factors of austerity. Mark Blyth pointed out in his book (Austerity: The History of a Bad Idea) that austerity does not work – it’s publicly proclaimed aims and objectives are never achieved. Because austerity is essentially the placing of a foot on the money supply and pressing down hard.
That is because in actual fact austerity is class warfare on working people perpetrated by the capital acquisitive class – this is what Clara Mattei’s research in her book ‘The Capital Order’ revealed. Austerity is a brutal control and destabilisation method to be used by tyrants to stop working people taking control of their lives and having a say in the way they are ruled. It also encourages wealth extraction on a huge scale.
The only new bit of todays austerity is its relationship to AI. AI will be the next excuse levered into the austerity justification business.
Much to agree with