Chancellor Rachel Reeves is set to unveil the UK government’s spending review today, which sets the budgets for all government departments over the next few years.

The review will confirm how much of taxpayers’ money will be spent on the NHS and other public services used by millions.

It will also set out how much cash the government plans to invest in projects like new public transport schemes.

She is expected to:

Place a £39bn affordable homes plan at the centre of the review

Give the NHS a 2.8% real-terms rise in annual day-to-day spending over three years

Announce increases in spending on defence and schools

Pledge £11.5bn of new state funding for the Sizewell C nuclear project in Suffolk, taking the total taxpayer investment in the site to £17.8bn

Reinstate winter fuel payments for pensioners, in a major policy U-turn by the UK treasury

Extend the £3 bus fare cap until March 2027

Give £15.6bn for public transport projects in England’s city regions and £445m for upgrades to Welsh railways

The spending review will be delivered by Reeves later today. She will make the announcement at around 12h30 BST, after prime minister’s questions.

Follow along for live updates throughout the day:

LIVE

9 updates

Ministers arriving in Downing Street for cabinet meeting ahead of spending review Ministers began arriving at Downing Street on Wednesday morning ahead of a cabinet meeting to approve the chancellor’s Spending Review, due to be delivered in the House of Commons at lunchtime. The meeting marks the final stage of a process that will formally set departmental budgets for the coming years. While the gathering will serve as a symbolic sign-off by senior government figures, the substance of the review has already been finalised following a flurry of eleventh-hour negotiations. Home Secretary Yvette Cooper is understood to have held out until late Monday night before agreeing terms for her department, while Deputy Prime Minister Angela Rayner only signed off on the Treasury’s allocations for her brief late on Sunday. With the details now locked in, ministers are expected to swiftly endorse the review during this morning’s cabinet session before making their way to the House of Commons. The review will follow Prime Minister’s Questions at midday, where the government is likely to face scrutiny on both the scale and priorities of the planned spending.

How the government’s spending review could impact your finances As the government’s spending review looms large on the economic horizon next week, speculation about what is set to change is ramping up. Experts from the Institute for Fiscal Studies (IFS) have already said “unavoidable” tough choices are inevitable on 11 June, but it remains to be seen how those might affect the man on the street. The IFS’s evaluation, released at the weekend, showed the level of spending on health would dictate whether cuts were made to “unprotected” areas — those outside the NHS, defence and schools. The conversation this week has heavily centred on an incoming increase in defence spending, with prime minister Keir Starmer outlining plans to invest in 12 new military submarines. While many uttered a sigh of relief at the announcement the government would look to revisit its winter fuel allowance decision, general anxiety is setting in about the possible impact of more tax rises, as the government works out what else can be cut or tweaked to fund its plans. Read more here

Rachel Reeves to unveil £39bn housing boost Other announcements expected on Wednesday include £39bn for social and affordable housing over the next decade as the Government aims to meet its target of building 1.5 million new homes by the next election. The Treasury said this would see annual investment in affordable housing rise to £4bn by 2029/30, almost double the average of £2.3bn between 2021 and 2026. The additional spending has been welcomed by homelessness charities, with Crisis calling it “a determined political signal that housing really matters” and Shelter describing the move as “a watershed moment in tackling the housing emergency”. The chancellor has also already announced some £15.6bn of spending on public transport in England’s city regions, and £16.7bn for nuclear power projects, the bulk of which will fund the new Sizewell C plant in Suffolk. There is also expected to be an extension of the £3 bus fare cap until March 2027 and an extra £445 million for upgrading Welsh railways. The government has also promised £750m for a new supercomputer – the UK’s most powerful – in Edinburgh. But one of the big losers from the spending review could be London, which is not expected to receive funding for any significant infrastructure projects or powers to introduce a tourist levy – both key requests from Mayor Sadiq Khan.

What the winter fuel allowance U-turn means for your finances Winter fuel payments for pensioners are to be reinstated in a significant policy U-turn by the UK Treasury. Experts say this move could add complexity to the system without generating much reward. HM Treasury said everyone over the state pension age in England and Wales with an income of, or below, £35,000 a year will be able to benefit from a winter fuel payment this winter. The much-debated higher threshold means no lower- or middle-income pensioners will miss out, with the vast majority — over three quarters — receiving the payment. Read more here

Tories accuse government of ‘spending money it doesn’t have’ Shadow chancellor Mel Stride said this will be “the ‘spend today, tax tomorrow’ spending review” – arguing that the government is “spending money it doesn’t have, with no credible plan to pay for it”. He said in a statement:

Defence to get an extra £5bn a year Defence spending will rise from 2.3% of gross domestic product (GDP) to 2.5% by 2027 – an increase of around an extra £5bn a year. This will be paid by cutting the overseas aid budget. Ministers want to increase defence spending to 3% by 2034 as the US pressures European countries to spend more on their own militaries. The government has already vowed to increase defence spending to 2.5% of GDP by 2027.

NHS to get a 2.8% rise in annual day-to-day health spending The chancellor is set to give the NHS a 2.8% real-terms rise in annual day-to-day health spending over the three-year spending review period starting April next year, according to the Financial Times. Although the rise is less than the long-term average increase since the service was founded in 1948, the £30bn-a-year rise in cash terms by 2028-29 is better than some in the service had feared. Mark Leftwich, Philips UK and Ireland managing director, said: “The chancellor’s decision to prioritise investment in the NHS is a positive step forward but we will never hit waiting list targets without AI. There are 7.4 million patients on hospital waiting lists, and just six in ten are beginning treatment within 18 weeks. “It’s crucial this funding must be focused on digital innovations that drive operational and financial gains, whilst bringing care closer to home. Only then will we see the full impact of innovation and AI, and patients will start to embrace it as much as doctors. “Technology has the power to help unlock the NHS’s true value and change the future of healthcare. We need to work together, with the government and wider industry partners, to enable the transformation that is needed to deliver better care for more people.” Philips provides health technology equipment to the NHS, including MRI & CT scanners, ultrasound and X-ray solutions.

What to expect from the Spending Review? The Chancellor has already announced some £15.6bn of spending on public transport in England’s city regions, and £16.7bn for nuclear power projects, the bulk of which will fund the new Sizewell C plant in Suffolk. But the spending review is expected to set out tough spending limits for departments other than health, defence and education. Although Reeves is reported to have agreed to an above-inflation increase in the policing budget, this is thought to have come at the expense of cuts in other parts of Home Office spending. And sources close to London Mayor Sadiq Khan have expressed concern that the spending review will have nothing for the capital. Ahead of the spending review, the Institute for Fiscal Studies has warned that any increase in NHS funding above 2.5% is likely to mean real-terms cuts for other departments or further tax rises to come in the budget this autumn. The chancellor has already insisted that her fiscal rules remain in place, along with Labour’s manifesto commitment not to increase income tax, national insurance or VAT. She will say on Wednesday: “I have made my choices. In place of chaos, I choose stability. In place of decline, I choose investment. In place of retreat, I choose national renewal. “These are my choices. These are this government’s choices. These are the British people’s choices.”

Reeves to promise investment in ‘renewal’ as she unveils spending plans Rachel Reeves will vow to “invest in Britain’s renewal” as she reveals her spending plans for the coming years on Wednesday. The chancellor is expected to announce big increases in spending on the NHS, defence and schools as part of a spending review set to include £113bn of investment thanks to looser borrowing rules. She will also reveal changes to the Treasury’s “green book” rules that govern which projects receive investment in an effort to boost spending outside London and the South East. Arguing that this investment is “possible only because of the stability I have introduced” after the October budget, Reeves is expected to say her spending review will “ensure that renewal is felt in people’s everyday lives, their jobs, their communities”. She will say: “The priorities in this spending review are the priorities of working people. “To invest in our country’s security, health and economy so working people all over our country are better off.” Among the other announcements expected at the spending review is £39bn for affordable homes over the next 10 years as the government seeks to meet its promise of building 1.5 million homes by the next election.

Download the Yahoo Finance app, available for Apple and Android.