Tue, 09 Sep 2025

Tue, 09 Sep 2025 Reeves tightens departmental spending ahead of budget

Ahead of the Autumn budget, the chancellor is limiting access to the Treasury's emergency funds.
Labour's Chancellor Rachel Reeves has announced that government departments will have limited access to the Treasury's emergency funds ahead of the budget, as part of efforts to stick to borrowing rules and reduce public debt. Reeves has written to cabinet colleagues stating that only departments that have maximised their savings will be considered for funding from the £9bn Treasury Reserve, which is designed to cover unforeseen pressures. The Chancellor warned that any funds borrowed from the reserve would need to be repaid, as part of efforts to keep department spending within agreed totals. Economists have previously warned that Reeves will need to increase taxes or make spending cuts to meet her borrowing rules, which include balancing day-to-day government costs through tax income by 2029-30. Reeves has said the focus over Autumn will be on reducing inflation, controlling spending and kickstarting growth. She referenced recent bond market fragility in many advanced economies at cabinet, saying stability is crucial for economic growth in a volatile global environment. The Chancellor also expressed her preference to spend more money on public services rather than debt repayment, stating that she would rather cut hospital waiting lists, tackle illegal migration and keep the country safe rather than pay off debts accrued by previous governments.
  >>