Spending Review 2025: Key takeaways and sector responses on health, social care and housing
The Chancellor of the Exchequer Rachel Reeves yesterday delivered her Spending Review, which sets out the day-to-day budgets of government departments and public services over the next three years.
Announcements in the review included a three per cent increase in spending on health services over the spending review period, which will amount to an extra £29 billion in spending overall and help the NHS cope with rising demand from people with multiple or more complex physical and mental health conditions.
The Treasury states that it is also looking to move money and care closer to where people live by providing additional funding by 2028-29 to support the training of thousands more GPs. Meanwhile, up to £10 billion will be spent on NHS technology and digital transformation by 2028-2029, an almost 50 per cent increase from 2025-26.
Over £4 billion in funding could be available for adult social care in 2028-29 compared to 2025-26. This includes an increase to the NHS’s minimum contribution via the Better Care Fund.
The government announced a £39 billion boost to social and affordable housing investment, which will be spread over 10 years from 2026-27 to 2035-36. It was not confirmed whether this will be used for more accessible homes and supported housing.
Many sector leaders expressed disappointment regarding the government’s spending plans for social care…
Tom Marsland, Head of Policy at the national disability charity Sense, said: “The lack of focus on social care in the Spending Review will come as a huge disappointment to the 1.6 million disabled people with complex needs across the country and their families.
“The social care system should be a lifeline for disabled people. It should be working alongside the NHS to deliver vital services. But for years it has been underfunded, left to lag behind until now it is utterly broken.
“Sense has welcomed and will work with the Casey Commission as it makes recommendations to transform social care in the long term. But there will be no big changes until at least 2028. Social care is in crisis – disabled people can’t wait that long for change. Urgent investment in social care is needed now.”
Amy Little, Head of Advocacy at disability charity Leonard Cheshire, said: “In her speech today, the Chancellor backed a Fair Pay Agreement for social care workers. Yet it is not clear if the Fair Pay Agreement has enough funding or when it will see the light of day.
“Social care providers are still reeling from the rise in employer National Insurance. Government funding must soon reach the pockets of our essential social care workforce. Without enough social care workers, disabled people will miss out on vital support to live their lives as they choose.”
Councillor Tim Oliver, Chair of the County Councils Network (CCN), said: “This Spending Review will not be a silver bullet for councils’ financial challenges, and much of the increase in ‘core spending power’ is derived from the assumption that local authorities will levy maximum five per cent council tax rises each year.
“Even accounting for these, the sums today fall well short of filling the projected £2.2bn funding gap faced by county and unitary councils next year and consequently further service cuts will be hard to avoid.”
Dr Rhidian Hughes, Chief Executive of the Voluntary Organisations Disability Group (VODG) says: “‘Today’s Spending Review confirms welcome investment in children’s social care, SEND, employment support, housing and the NHS. It was, however, a missed opportunity to address and invest in social care in its own right.
“The money that is being made available over the Spending Review period is reliant on flowing through the NHS and local government and our experience shows this rarely gets to where it’s needed. We need a strong and secure funding base that values social care as an essential public service and upholds all legal entitlements, rights and the dignity of disabled people.”
Kathryn Smith OBE, Chief Executive at SCIE, said: “Today’s announcements are a step in the right direction – but far from the bold, coordinated investment needed for effective reform. Social care is not a standalone service and it does not operate in a silo. It interfaces with housing, healthcare, and mental health support.
“The care system can play a role in alleviating pressures across other public services, but without stable funding and investment, it could also compound them. In other words, the Government’s vision for the country depends on an appropriately resourced social care sector. The Government must see social care as foundational to the country’s future, not a service of last resort.”
Karolina Gerlich, CEO of The Care Workers’ Charity, stated: “This Spending Review offered bold words – but care workers needed bold action. Without meaningful investment and proper recognition, we are condemning a vital workforce to continue operating under strain, undervalued and under-resourced.”
