Coffee House Shots How to do a spending review
May 28, 2025
James Nation, Managing Director at Forefront Advisers and a former HM Treasury and Number 10 official, shares insights on the upcoming Labour spending review. He discusses the intricate negotiations between the Treasury and government departments, the impact of the pandemic on local budgets, and the political stakes involved. Nation also reflects on Rishi Sunak’s past decisions and the shifting public sentiment towards his government. The conversation reveals the ongoing tensions and priorities within fiscal policies amidst economic pressures.
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Spending Review Negotiation Dynamics
- The spending review negotiations intensify as difficult departments seek direct attention from top government officials.
- Ministers negotiate over budget allocations that started at the year's beginning with Treasury funding envelopes.
Protected vs Unprotected Departments
- Departments like Defence and Health seem to secure favourable capital funding without public complaints.
- Unprotected departments face real-term cuts on day-to-day spending, fueling their pushback in negotiations.
Public Sector Pressures Persist
- Public sector is under increased pressures including councils, universities, and public sector pay despite budget increases.
- Pandemic impact and inflation have worsened the financial health of many public services.