Chancellor’s 2025 Spending Review: Verdicts from Cambridgeshire
There was a mixed response to Chancellor Rachel Reeves’ Comprehensive Spending Review in Cambridgeshire.
Perhaps surprisingly, given the government’s intense economic interest on Cambridge, there were no specific announcements on Cambridgeshire, although £2.5billion was confirmed to progress East West Rail.
The government said it would “shortly set out plans for new towns and Cambridge”.
There was a welcome, however, for the focus on research and development and spending on the NHS.
Below are four verdicts on the Spending Review but first, here are the key points from Rachel Reeves’ announcements:
NHS funding will rise by £29 billion a year, increasing to £226 billion by 2028-29, equivalent to 3 per cent annual increases in real terms, which will mean squeezing other areas of public expenditure.
– The schools budget will grow by £2 billion at an average real-terms growth of 1.1 per cent a year per pupil.
– £2.5billion for East West Rail between Oxford and Cambridge and a further £3.5 billion of investment to upgrade the TransPennine rail route that links York, Leeds and Manchester.
– £7billion to fund 14,000 new prison places and up to £700million per year into reform of the probation system.
– Universities and high-tech industries will get a boost in research and development, with it rising to £22 billion per year by the end of the spending review, with £2 billion to support “home-grown AI”.
– Police “spending power” – including extra cash raised from council tax – will rise by 2.3 per cent a year in real terms over the review period, providing more than £2 billion for forces.
– Confirmation of previously trailed announcements of £30billion for nuclear projects, including £14.2billion for Sizewell C, £39billion over 10 years for social housing and £15billion for public transport projects in England’s city regions.
Council leader hopes national announcements translate to improved services locally
Cllr Lucy Nethsingha, the Liberal Democrat leader of Cambridgeshire County Council, said: “Whilst I’m disappointed there wasn’t any news for Cambridgeshire specifically, or for the adult social care challenges we face, the Chancellor did touch on investment in some of the areas we provide services, so we’ll wait to see how that translates.
“It was welcome to hear the Chancellor outline the need to invest in our economy, our schools and the NHS. We often see the pressures through our adults and health committee, so I’m pleased to hear about the increasing funding for the NHS in real-terms and helping them day-to-day.
“Hearing a commitment to help build and contribute to the skills of our young people was positive. I recognise the great work of our apprentices, past and present, and it’s important we support their growth and skills. Last year, we launched a new scheme offering a fully funded social work degree and work experience.
“We await to see the impact of the fourfold increase in local transport grants, what that will mean for the Cambridgeshire and Peterborough Combined Authority and how we can support them as the highway authority.
“Similarly, our highways and transport committee will continue to look at how they can ensure communities’ voices are heard with the £2.5bn investment for the continued delivery of East West Rail. This is a project which falls into the Nationally Significant Infrastructure Project (NSIP) process. We have some concerns about the proposals around the electrification of the route, ecology and the impact on our roads and public rights of way. We will continue to work with East West Rail to address those concerns and represent our residents’ views.
“Finally, I was glad to hear the investment in our children who need it most. The cost of living is a constant challenge, so the extension to free school meals will provide a real benefit to those children in poverty and the continuation with the national rollout of breakfast clubs will ensure every child has the best chance to thrive and succeed.
“Whilst we also welcome the announcement of some further funds for SEND in the next two years, we are concerned that this will be insufficient given the scale of the pressures faced locally and in many areas across the country. The Spending Review gives details of the government’s intended approach to SEND reform, which will be set out in the autumn. We are seeing a significant rise in the number of children with SEND and a corresponding increase in the complexity of needs – making this a high priority area for Cambridgeshire.”
Industry welcomes news of R&D spending
John Hartley, CEO of Cambridge-based climate tech business Levidian, said: “Today’s Spending Review is a multi-billion pound shot in the arm for the UK’s R&D sector.
“As a business born out of one of the greatest universities in the world (Cambridge!), we welcome the news of further support for scale ups through the British Business Bank and the Local Innovation Partnerships Fund, which will help drive further innovations, jobs and skills.
“Three years on from the launch of our first LOOP pilot, we’re putting Britain back on the map as leaders in graphene, forging ahead with the deployment of our second-generation technology, capturing more carbon and producing more high-quality graphene than ever before. This is British innovation at its best and a great example of what can be achieved with the right support.”
Cambridge’s Labour MP believes it will be ‘transformative’
Daniel Zeichner, Cambridge’s Labour MP, calling the Spending Review "a transformative investment in Britain’s renewal that delivers real benefits for Cambridge, our region and the future of our country”.
He welcomed the £2.5bn funding for East West Rail and the record funding for R&D, which will rise to more than £22bn a year, along with the £30bn investment in clean energy.
“This Spending Review is about getting Britain moving again, and I am proud that Labour is backing East West Rail with real investment. This isn’t just about better train services, it’s about unlocking thousands of homes, creating jobs and growing our world-leading science and innovation economy,” he said.
“Cambridge plays a key role in shaping Britain’s future through science, innovation and clean growth, but we can’t achieve our full potential without the infrastructure to match. For too long we have been held back by underinvestment and piecemeal promises, but now Labour is changing that. This Spending Review shows we have a plan, we have priorities, and we are delivering.”
Liberal Democrat MP Pippa Heylings says the government has failed to close black hole in social care
Pippa Heylings, Liberal Democrat MP for South Cambridgeshire, has criticised the government for neglecting social care with their failure to provide additional investment.
“The Chancellor’s smoke and mirrors spending review has done next to nothing to close the black hole in social care. Local authorities are legally obliged to provide social care, yet spiralling costs and stretched resources are pushing them to the brink.
“With council budgets stretched to breaking point, on top of the government’s hike to employers’ National Insurance, pressure will continue to be applied to a sector already in crisis.
“The Liberal Democrats will be watching carefully to ensure any additional funding is fairly allocated and that support reaches the front line, not lost in bureaucracy or box-ticking.”
Mayor Paul Bristow says he’ll push for more
Conservative mayor of Cambridgeshire and Peterborough said: “There was silence today on critical upgrades like Ely Junction and the Peterborough Station Quarter. These projects are essential to unlocking growth, jobs, and investment across our region.
“I’ll keep pushing. If government is serious about supporting economic growth in all parts of the country, that commitment must include the East of England.”
And he had been hoping for better news on Peterborough Sports Quarter.
“Just over five weeks ago, residents in Cambridgeshire and Peterborough elected me to be their mayor – on a clear mandate to get our region moving and deliver a new community stadium for Peterborough.
“That means a new home for Peterborough United but also a top class venue for other major sporting events and music concerts. This will attract visitors from across the UK, reignite our long-lost music scene and nightlife, and provide a much-needed swimming pool for local people.
“If today’s announcement from government helps deliver this, then this is to be welcomed. But at this stage, it raises more questions than answers. While funding has been allocated to a national scheme, there is no clarity yet on how much – if any – of this will be allocated to Peterborough, nor is there a plan for delivery or an explanation of how this will enable the city’s vision for a game-changing community stadium.
“A sports quarter has to be properly thought through. It needs to be more than a commitment to consider a business case that Peterborough City Council may or may not write.
“Transformational projects like this are the reason devolved mayors were established. government have pledged to empower mayors and back further devolution. I expect that Cambridgeshire and Peterborough Combined Authority will be a key player in the delivery of a proper sports quarter for Peterborough that includes a community stadium.”
The reaction nationally
Shadow chancellor Sir Mel Stride said “this is the spend-now, tax-later review”, adding Ms Reeves “knows she will need to come back here in the autumn with yet more taxes and a cruel summer of speculation awaits”.
Paul Johnson, of the Institute for Fiscal Studies, said the cash for the NHS and defence might not prove to be enough, with pressure on the Government on both fronts.
Matthew Taylor, chief executive of the NHS Confederation, warned that “difficult decisions will still need to be made as this additional £29 billion won’t be enough to cover the increasing cost of new treatments, with staff pay likely to account for a large proportion of it”.
