Angela Rayner has finally agreed a deal with Rachel Reeves on how much money she will receive for house building and councils in this week’s crunch spending review.
The Deputy Prime Minister had been one of the last holdouts in an intense Cabinet battle over spending settlements, as priority was given to the NHS, schools and defence, meaning other departments faced real-terms cuts..
Rayner and the Chancellor are likely to argue that the agreement, a mere 64 hours before Reeves unveils the spending review on Wednesday, keeps the Government’s target for building 1.5m homes on track while preventing cash-strapped councils from going bust.
It leaves Home Secretary Yvette Cooper as the last remaining Cabinet minister to still be pushing for more as she attempts to secure extra money for the police after senior officers warned in recent days that cuts could threaten public safety.
The i Paper understands that Rayner and Reeves agreed a deal just after 7.30pm after marathon talks on Sunday.
But Home Office and Treasury sources were tight lipped on Sunday, in an indication that negotiations over police funding are also going to the wire.
Yvette Cooper is attempting to secure extra money for the police (Photo by Jan Kruger/Getty Images)In a signal that the Treasury was digging in in talks with the Home Office, Technology Secretary Peter Kyle on Sunday told BBC’s Sunday with Laura Kuenssberg that the police must “do their bit” as the Government looks to fund “key priorities”.
Reports suggested talks Reeves and her Treasury colleagues held with Rayner and Cooper had become heated as the two powerful Cabinet ministers demanded more money to meet the Government’s priorities.
Allies of Rayner, who is also the Housing Secretary, denied reports that the talks had got so tense that she had stormed out of meetings with the Treasury and slammed doors.
But Labour’s deputy leader is understood to have taken a robust approach to the talks as she battles to ensure she can fulfil the party’s pledges.
Unlike many other departments, the Deputy Prime Minister was negotiating across two budgets – the local government funding settlement and the cash that will be allocated to her department.
The Affordable Homes programme is meanwhile classed as capital spending, which can to an extent be funded by borrowing, while the local government funding settlement is current spending that must be balanced with taxes, which further complicated matters.
While some departments will face real-terms cuts, Reeves is likely to point to previous big funding boosts in the autumn Budget including £1.1bn for police this year and an extra £500m for social housing, as proof that the spending review is no return to austerity.
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Government sources insisted that ministers will be able to meet key “milestone” targets of building 1.5m homes and recruiting 13,000 additional neighbourhood police officers after the review allocates departmental budgets for the next three years.
The Department of Health is set to be the biggest winner in Ms Reeves’ spending review on Wednesday, with the NHS receiving a boost of up to £30 billion at the expense of other public services.
Economists have said the expected 2.8 per cent annual increase in its day-to-day budget, which amounts to a rise of about £30bn by 2028, or £17bn in real terms, will see other departments squeezed.
Day-to-day funding for schools is expected to increase by an extra £4.5bn by 2028-9 compared with the 2025-6 core budget, which was published in the spring statement.
The Government meanwhile over the weekend announced a boost for research and development worth £22.5bn a year by 2029/30 to help sectors such as tech, life sciences, advanced manufacturing and defence.
The Department of Health is set to be the biggest winner in Ms Reeves’ spending review on Wednesday, with the NHS receiving a boost of up to £30bn at the expense of other public services.
Economists have said the expected 2.8 per cent annual increase in its day-to-day budget, which amounts to a rise of about £30 billion by 2028, or £17bn in real terms, will see other departments squeezed.
Day-to-day funding for schools is expected to increase by an extra £4.5bn by 2028-9 compared with the 2025-6 core budget, which was published in the spring statement.
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