Fiona Colley, Director of Social Change reflects on the first big announcements on the economy from the new government.
The headlines of Rachel Reeves’ “Spending Inheritance” speech have of course focused on winter fuel allowance and the £22 billion hole in public finances claimed to be left behind by the previous government.
But the statement also included vital news for commissioned homelessness services facing funding cliff edges next March as she laid out her plans for reviewing public spending. Decisions for 2025-26 will be taken within weeks alongside a longer-term review concluding next Spring. For Homeless Link and our members time is of the essence to ensure funding for homelessness is maintained next year and that a renewed, holistic and long-term approach to homelessness funding is taken in the years beyond.
Comprehensive Spending Review Timeline
The Chancellor announced she has commenced a multi-year spending review that will decide public spending levels for at least three years (2025-2028).
She will announce spending budgets for 2025-26 on 30 October, alongside announcements on tax and welfare. This will include decisions on whether key funding programmes like the Rough Sleeping Initiative continue in 2025-26 and allow for local authorities to get draft one-year spending settlements before Christmas.
Decisions on spending in the following years will be announced when the review fully concludes in Spring 2025.
Reeves also announced that she will ensure that in future she will bring stability and certainty to public service budgets by conducting Spending Reviews every two years with a minimum planning horizon of three years. This will be very welcome news for senior leaders and finance chiefs across the sector!
An opportunity and a threat
Overall the approach to the Spending Review is welcome – decisions by October will give certainty for next year, while allowing more time for an in-depth review for future years. We’ll be calling for the Government to use this time to regain strategic control over spending on homelessness and redesign the homelessness funding system – ideally replacing the existing piecemeal and short-term funding structures with a long-term, ring-fenced homelessness support fund.
But Reeves told Parliament to expect “difficult decisions” this October and there is no doubt that alongside our calls for a comprehensive review, we will need to fight hard to protect current spending levels in 2025-26 and keep the doors of homelessness services open.
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