Keir Starmer to launch major review of UK government spending

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Sir Keir Starmer will launch a major twice-yearly review of all government spending next week, with ministers urged to make their case for scarce public funds in a line-by-line haggle with the Treasury.

Britain's prime minister has warned departments they will have to fight for money under a tough Whitehall spending package set by Chancellor Rachel Reeves in October's Budget, as part of a so-called “zero-based” revision.

“It’s going to be deadly, but it has to be,” a government official said. Chief Secretary to the Treasury Darren Jones will set out the terms of the spending review, which will be completed next June, in a letter to ministers on Tuesday.

Starmer's allies say the money will be allocated based on priorities set out by the Prime Minister in his “plan for change” Thursday, which focused on living standards, housing and infrastructure, hospitals, early childhood education, green energy and crime.

Star Britain will also face pressure to increase its military spending, with a defense report early next year setting out when and how Britain should increase its spending by 2.3 percent of national income at 2.5 percent.

The Prime Minister reiterated his message to big-spending ministers on Friday that they could no longer expect extra taxes or extra borrowing to fund higher public spending.

Asked by BBC Breakfast As for whether taxes would rise again in this Parliament, Starmer said: “I don't want to suggest that we're going to keep coming back for more because that's not the plan.

“What I can’t do is tell you that there are no unforeseen circumstances in the future that wouldn’t result in any change.”

Reeves' budget set departmental spending limits for 2025-26 as part of a £40 billion tax rise package that injected billions of pounds into public services over the current year and the following year.

But the chancellor has postponed tough long-term decisions on public spending, with overall spending growth expected to slow after 2025-26 to a real rate of 1.3 per cent a year.

Reeves, write in the Financial Timessaid on Friday it would call on private sector experts to advise on how to get the most out of the spending review exercise.

“In order to maximize the value of every pound, the spending review will be zero-based, meaning every line will be assessed to determine whether it represents good value for money and is a priority for this Government” , she said.

“No vanity projects. No distractions. No gimmicks. But practical goals based on the public feeling in their daily lives that we have delivered the change we promised,” Reeves added.

Meanwhile, Starmer attempted to quell civil service fury after claiming on Thursday that “too many people in Whitehall are comfortable in the lukewarm bath of managed decline”.

Dave Penman, chairman of the FDA union which represents 20,000 of the most senior civil servants, said Starmer's comments were “frankly insulting to those who try to deliver and run our public services”.

Penman, in a letter to Starmer, denounced the Prime Minister's “Trumpian language”, adding that civil servants must be “motivated and inspired, not ridiculed and vilified”.

Whitehall insiders said the Prime Minister had been warned his comments had caused outrage. Starmer later tried to calm the conflict, saying civil servants “bring a strong sense of public service to everything they do”.

But he added: “At the same time, I also know that we must impose reforms. We need to make government work better. And talking to officials, they know that's what they want.