by Darwin Friend, head of research
Today's Spending Review should have been an opportunity to set priorities and bring some discipline to the public finances. Instead, it confirmed what taxpayers have long feared. Rather than balancing the books, the government is committed to a reckless approach of funding everything, ensuring that very little is delivered effectively for the people who pay for it all.
The chancellor rattled through a litany of figures during her speech, billions for housing, billions for nuclear power, billions for railways. Total departmental budgets are set to grow by 2.3 per cent a year in real terms. Defence spending will rise to 2.6 per cent of GDP by 2027 (including intelligence agencies), paid for by slicing the overseas aid budget. The NHS will receive its largest ever cash injection, with its budget rising by three per cent annually and its technology funding is going up by 50 per cent. There’s £30 billion earmarked for nuclear energy, £7 billion for prison places, £1.2 billion annually for youth training and apprenticeships, and billions more for new railway lines and new police officers.
But for all the headline figures, the reality is bleak. This isn’t a government being strategic or focused. It’s a government addicted to spending, throwing taxpayers’ money across every corner of the state in an attempt to be all things to all people. And crucially, every penny of this splurge is only possible because of last year’s tax rises. The chancellor didn’t admit it, but the truth is clear: without raiding the wallets of working people, today’s announcements would have been impossible. Understandably, taxpayers are bracing themselves for yet another round of tax rises come this year's budget in the autumn.
What’s more, the “spending review period” covers the years from 2026-27 onwards. Yet the government is using 2023-24 as the baseline for most of its figures, conveniently ignoring the fact that there’s already been a big increase in public spending in 2024-25 and 2025-26. It paints a misleading picture of generosity. In fact, once these earlier increases are baked in, growth in real-terms spending across most departments flattens significantly during the actual review period.
And yet, with all this money flying around, are taxpayers seeing real improvements? Public services are underperforming across the board. NHS waiting lists remain stubbornly high, school standards are slipping, and the justice system is buckling under the weight of backlogs. Throwing more money at broken systems without serious reform won’t fix the problem. It just locks in failure at a higher cost.
The government says it will fund some of this through “efficiencies” and “savings,” discovered via a ‘zero-based review’. Yet every pound identified will be “reinvested”, not used to reduce the record tax burden. In other words, even when savings are found, taxpayers won’t see a penny back. That means we will continue heading towards a record-high tax burden.
This proves whose side the government is on – and it isn’t the taxpayer's. They see households not as people to be served, but as a source of revenue to be squeezed. Today was all about finding new things to do and new ways to spend money, with little thought for the taxpayers who will be footing the bill.
This all comes at a time when the UK’s national debt stands above £2.7 trillion. If the government thinks today’s announcement of more funding for the NHS is large, wait until they see the amount of debt interest we pay every year. Yet today’s speech didn’t even mention the debt, let alone offer a plan to tackle it.
The result is a state that does a bit of everything and excels at nothing. Taxpayers are being squeezed harder than ever, but services continue to deteriorate. We were told that austerity is a “destructive choice for our society,” but the alternative of endless expansion without prioritisation is arguably worse. It leads to bloated bureaucracies, wasted billions, and mounting frustration from the very people footing the bill.
Today’s review didn’t answer the big questions. It didn’t explain how long-term spending will be kept under control, how productivity in the public sector will improve, or how taxpayers will ever get value for money again. Instead, it confirmed that the government continues to confuse activity with achievement.
We don’t need the government to do more, we need it to do less, better. That means focusing on core responsibilities, delivering public services efficiently, and giving people back more of their own money.