Rachel Reeves: Spending Review 2025 unveils record NHS funding, pledges to end hotel use for asylum seekers

Speaking at the House of Commons on Wednesday afternoon (June 11), Reeves described the review as the first “line-by-line” assessment of government spending since 2007, vowing to “be ruthless in calling out waste with every penny being reinvested back into public services.”

Prime Minister Sir Keir Starmer called the review “the end of the first phase of this Government” and the beginning of delivering on Labour’s promise of renewal for working people.

NHS

• £29 billion extra per year for the NHS, with day-to-day spending rising by 3% per year throughout the review.
• Funding includes £10 billion for digitising services as part of a 10-year health plan.
• Reeves said: “More appointments. More doctors. More scanners. The National Health Service, created by a Labour government, protected, by a Labour government, and renewed, by this Labour Government.”

Asylum and Borders

• £280 million more per year by the end of the review for the Border Security Command.
• Reeves confirmed the “costly use of hotels to house asylum seekers” will end within this Parliament, pledging to clear the backlog and return those with no right to remain.
• She said: “We will be ending the costly use of hotels to house asylum seekers in this Parliament… saving the taxpayer £1 billion per year.”

Education

• £370 million for school-based nurseries.
• £555 million to improve children’s social care and reduce unnecessary placements.
• More than £130 million from the Dormant Assets scheme for school libraries, music, sport, and drama.
• £4.5 billion per year added to the core schools budget by the end of the spending review.
• £2.3 billion per year to repair crumbling classrooms.
• £2.4 billion per year to continue the programme to rebuild 500 schools.

Housing

• £39 billion over 10 years for a new Affordable Homes Programme, the largest investment in social and affordable housing in 50 years.

Policing

• £2 billion to support 13,000 new police officers, PCSOs, and special constables.
• Police spending to rise by 2.3% in real terms annually.

Defence

• Defence spending to rise to 2.6% of GDP by April 2027.
• £11 billion uplift for defence, £600 million for security and intelligence services.
• £4.5 billion for munitions and £6 billion for nuclear submarine production.

Infrastructure and transport

• £3.5 billion for TransPennine route upgrade.
• £2.5 billion for East-West rail connecting Oxford, Milton Keynes, and Cambridge.

Regional development

• Largest real-terms settlements since devolution: £52 billion for Scotland £23 billion for Wales £20 billion for Northern Ireland
• £118 million for coal tip safety in Wales.
• Additional funds for 350 communities, especially in deprived areas.

Skills, Jobs, and Industry

• £1.2 billion for training and apprenticeships.
• £2 billion to implement the AI Action Plan.
• British Business Bank capacity raised to £25.6 billion to support small business growth.

Energy and Environment

• £2.5 billion for small modular nuclear reactors via Rolls-Royce.
• £2.5 billion for nuclear fusion.
• Support confirmed for the Acorn carbon capture project in Scotland.

Concluding her speech Reeves said the spending review would “deliver the priorities” of the British people. After announcing a series of extra spending pledges in a speech that lasted around 45 minutes, she told MPs: “This is a spending review to deliver the priorities of the British people.

“Security, a strong Britain, in a changing world. Economic growth, powered by investment and opportunity in every part of Britain. And our nation’s health, with an NHS, fit for the future.

“I have made my choices. In place of chaos, I choose stability. In place of decline, I choose investment. In place of pessimism, division and defeatism… …I choose national renewal. These are my choices. These are Labour’s choices. These are the choices of the British people.”