Yvette Cooper yet to agree deal three days before spending review
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Rayner and Reeves reach eleventh-hour truce in spending battle
Angela Rayner has finally agreed a deal with Rachel Reeves on how much money she will receive for house building and councils. The Deputy Prime Minister had been one of the last holdouts in an intense Cabinet battle over spending settlements. It leaves Home Secretary Yvette Cooper as the last remaining Cabinet minister to still be pushing for more money for the police. 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. The Department of Health is set to be the biggest winner in Ms Reeves’ spending review, with the NHS receiving a boost of up to £30 billion at the expense of other public services. 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.
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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, 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 on 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 would 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 complicates 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.
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.
Rachel Reeves in standoff over policing and council budgets days before spending review
Whitehall sources said the police would get more money, but there was still disagreement over the level of investment needed for the project. The project is expected to be completed by the end of the year. The company has not announced a price or a release date for the film yet. The film is due to be released in the fall of 2014. The movie will be based on the book “The First Conspiracy” by David Walliams and is due for release in the spring of 2015. It will be co-produced by Sony and distributed by 20th Century Fox in the U.S. and Europe. It is not known if the film will be shown in the UK or Europe at the same time or at a later date. It has not yet been announced if it will be screened in the United States or Europe, but it is expected that it will not be in the same way as the film. It could be shown on the same day or on the following day. It may also be shown at a different time in different parts of the country.
Yvette Cooper’s Home Office and Angela Rayner’s housing and local government ministry were the two departments still at the negotiating table on Sunday fighting for more cash, after weeks of trying to reach a settlement.
Whitehall sources said the policing budget would get real terms rises, but there was still disagreement over the level of investment needed for the Home Office to meet its commitments.
Rayner’s department is understood to have reached an agreement with the Treasury late on Sunday night after last-minute wrangling over housing, local councils and growth funds.
However, any failure to strike a deal would raise the prospect of a budget being imposed on an unwilling department.
The spending review, taking place on Wednesday, is a chance for Reeves to hold up billions of pounds of capital spending as a sign she is working to repair public services after years of Tory austerity. After tweaking her fiscal rules last autumn, she has an additional £113bn funded by borrowing for capital spending.
Her plans will include £86bn for science and technology across four years and an extra £4.5bn for schools – taking funding per pupil to its highest level ever.
However, day-to-day spending is more constrained in some areas, while the NHS and defence swallow up higher allocations.
As well as policing, the Home Office budget covers Border Force and spending on asylum costs, while the Ministry of Housing, Communities and Local Government has been battling for funds for the affordable homes programme, councils, homelessness and regional growth.
Labour has manifesto pledges to build 1.5m homes and deliver 13,000 new police officers.
Pressed on the policing budget, the technology secretary, Peter Kyle, said Home Office and others would have to “do their bit”.
Funding for the police has the potential to become a politically difficult issue for Keir Starmer. Tory former shadow cabinet minister Robert Jenrick has been campaigning against transport fare dodging and Nigel Farage’s Reform UK party is also highlighting the issue.
Asked about which public services will be prioritised, Kyle said “every part of our society is struggling” and numerous sectors had asked Reeves for more money.
“On the fact that the police have been writing to the chancellor, they have,” he told the BBC’s Sunday With Laura Kuenssberg programme. “We also have letters from the universities, we have letters from doctors about the health service, we have letters from campaigners for child poverty writing to us, and other aspects of challenges in Britain at the moment.
“Every part of our society is struggling because of the inheritance that we had as a country and as a government.”
He pointed to the £1.1bn extra funding already earmarked for police this year, as he defended Reeves’s handling of the spending review process.
“We expect the police to start embracing the change they need to do, to do their bit for change as well. We are doing our bit,” Kyle said.
“You see a chancellor that is striving to get investment to the key parts of our country that needs it the most … You will see the priorities of this government reflected in the spending review, which sets the departmental spending into the long term.
“But this is a partnership. Yes, the Treasury needs to find more money for those key priorities, but the people delivering them need to do their bit as well.”
While some areas of spending may be cut or receive only low increases, the NHS is set to receive an uplift of up to £30bn by 2028, while defence spending is expected to rise to 2.5% of GDP by 2027.
Kyle defended the chancellor’s approach to public spending, saying she was like Apple co-founder Steve Jobs who turned the company around when it was 90 days from insolvency.
He told Sky News’ Trevor Phillips: “Now Steve Jobs turned it around by inventing the iMac, moving to a series of products like the iPod.
“Now we’re starting to invest in the vaccine processes of the future. Some of the hi-tech solutions that are going to be high growth. We’re investing in our space sector. All these really high, highly innovative sectors.
“We are investing into those key innovations of the future. We know that we cannot break this vicious cycle of high tax and low growth by doing the same as we always have done. We have to innovate our way out of this and we are doing so by investing in those high-growth sectors.”
As part of the government’s drive to innovate, Starmer will on Monday unveil a plan to train a million schoolchildren and seven million workers in artificial intelligence (AI) at a cost of £187m.
Speaking at UK Tech Week, Starmer will say the government is “putting the power of AI into the hands of the next generation – so they can shape the future, not be shaped by it”.
“This training programme will unlock opportunity in every classroom – and lays the foundations for a new era of growth,” he will say. “Too many children from working families like the one I grew up in are written off. I am determined to end that.”
The Tories accused Labour of copying their own plans in office over the commitment to £86bn of science spending, and also said they would cut welfare spending to save money for extra policing.
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Philp opposed parts of the mini-budget – but decided not to resign. “I was arguing for spending restraint,” he says. “Those warnings were sadly not listened to,” he adds. “It’s the duty of ministers not to disagree with the government”
Earlier this morning, shadow home secretary Chris Philp spoke to Sunday Morning with Trevor Phillips.
He was asked about the fact that the Tory party attempted to disown themselves from Liz Truss last week.
Philp was working as a Treasury minister at the time, and it was briefed he may have been responsible for some of the more unpopular policies in the disastrous mini-budget.
Asked by Trevor about this, Philp says books about the time were correct in suggesting he argued against some of the spending plans.
The combination of tax cuts and increased spending in the mini-budget are what spooked markets, as they had no guarantee the UK government would be able to pay the debts it was taking out.
“I opposed the way that it was constructed – I was arguing for spending restraint,” Philp says.
“Those warnings were sadly not listened to. Obviously, I was bound by collective responsibility, as you know.”
This is the duty of ministers not to disagree with the decisions the government has made as a whole.
Asked why he didn’t resign, Philp says he felt it was better to argue the case “internally” to control spending.
UK government struggles to cut foreign aid spent on asylum hotels
Government struggles to cut foreign aid spent on asylum hotels in the UK. Home Office plans to spend £2.2bn of overseas development assistance this financial year. Money is largely used to cover the accommodation costs of thousands of asylum seekers. Under international rules, governments can spend some of their foreign aid budgets at home to support asylum seekers during the first year after their arrival. Labour promised in its manifesto to “end asylum hotels, saving the taxpayer billions of pounds” The Home Office said it was committed to ending asylum hotels and was speeding up asylum decisions to save taxpayers’ money. The BBC also understands the Home Office is working with the Greater Manchester combined authority on plans to increase the amount of dispersal accommodation available for asylum seekers, with the hope it would reduce the use of hotels. In February, Sir Keir Starmer said he would cut aid spending from 0.5% of gross national income to 0.3% by 2027 – a fall in absolute terms from about £14bn to some £9bn.
2 days ago Share Save James Landale • @BBCJLandale Diplomatic correspondent Share Save
PA
The government is struggling to cut the amount of foreign aid it spends on hotel bills for asylum seekers in the UK, the BBC has learnt. New figures released quietly by ministers in recent days show the Home Office plans to spend £2.2bn of overseas development assistance (ODA) this financial year – that is only marginally less than the £2.3bn it spent in 2024/25. The money is largely used to cover the accommodation costs of thousands of asylum seekers who have recently arrived in the UK. The Home Office said it was committed to ending asylum hotels and was speeding up asylum decisions to save taxpayers’ money.
It also said it had reduced overall asylum support costs by half a billion pounds in the last financial year. This had saved £200 million in ODA which had been passed back to the Treasury. The Home Office’s latest figures for foreign aid spending on asylum hotels were contained in a formal memorandum given to MPs on the Home Affairs Committee and published on its website on May 30. Foreign aid is supposed to be spent alleviating poverty by providing humanitarian and development assistance overseas. But under international rules, governments can spend some of their foreign aid budgets at home to support asylum seekers during the first year after their arrival. According to the most recent Home Office figures, there are about 32,000 asylum seekers in hotels in the UK. Labour promised in its manifesto to “end asylum hotels, saving the taxpayer billions of pounds”. Contracts signed by the Conservative government in 2019 were expected to see £4.5bn of public cash paid to three companies to accommodate asylum seekers over a 10-year period. But a report by spending watchdog the National Audit Office (NAO) in May said that number was expected to be £15.3bn.
On June 3, Home Secretary Yvette Cooper told the Home Affairs Committee she was “concerned about the level of money” being spent on asylum seekers’ accommodation and added: “We need to end asylum hotels altogether.” The Home Office said it was trying to bear down on the numbers by reducing the time asylum seekers can appeal against decisions. It is also planning to introduce tighter financial eligibility checks to ensure only those without means are housed. But Whitehall officials and international charities have said the Home Office has no incentive to reduce ODA spending because the money does not come out of its budgets. The scale of government aid spending on asylum hotels has meant huge cuts in UK support for humanitarian and development priorities across the world. Those cuts have been exacerbated by the government’s reductions to the overall ODA budget. In February, Sir Keir Starmer said he would cut aid spending from 0.5% of gross national income to 0.3% by 2027 – a fall in absolute terms from about £14bn to some £9bn. Such was the scale of aid spending on asylum hotels in recent years that the previous Conservative government gave the Foreign Office an extra £2bn to shore up its humanitarian commitments overseas. But Labour has refused to match that commitment. The BBC also understands the Home Office is working with the Greater Manchester combined authority on plans to increase the amount of dispersal accommodation available for asylum seekers, with the hope it would reduce the use of hotels. The supply of dispersal accommodation – which is longer-term, temporary housing – has not kept pace with record levels of asylum applications.
‘Poor value for money’
Gideon Rabinowitz, director of policy at the Bond network of development organisations, said: “Cutting the UK aid budget while using it to prop up Home Office costs is a reckless repeat of decisions taken by the previous Conservative government. “Diverting £2.2bn of UK aid to cover asylum accommodation in the UK is unsustainable, poor value for money, and comes at the expense of vital development and humanitarian programmes tackling the root causes of poverty, conflict and displacement. “It is essential that we support refugees and asylum seekers in the UK, but the government should not be robbing Peter to pay Paul.” Sarah Champion, chair of the International Development Committee, said the government was introducing “savage cuts” to its ODA spending, risking the UK’s development priorities and international reputation, while “Home Office raids on the aid budget” had barely reduced. “Aid is meant to help the poorest and most vulnerable across the world: to alleviate poverty, improve life chances and reduce the risk of conflict,” she said. “Allowing the Home Office to spend it in the UK makes this task even harder.” “The government must get a grip on spending aid in the UK,” she said. “The Spending Review needs to finally draw a line under this perverse use of taxpayer money designed to keep everyone safe and prosperous in their own homes, not funding inappropriate, expensive accommodation here.”
Getty Images The home secretary has previously said asylum hotels “need to end”
Shadow home secretary Chris Philp said: “Labour promised in their manifesto to end the use of asylum hotels for illegal immigrants. But the truth is there are now thousands more illegal migrants being housed in hotels under Labour. “Now these documents reveal that Labour are using foreign aid to pay for asylum hotel accommodation – yet another promise broken.” A Home Office spokesperson said: “We inherited an asylum system under exceptional pressure, and continue to take action, restoring order, and reduce costs. This will ultimately reduce the amount of Official Development Assistance spent to support asylum seekers and refugees in the UK. “We are immediately speeding up decisions and increasing returns so that we can end the use of hotels and save the taxpayer £4bn by 2026.”
Rayner and Reeves reach eleventh-hour truce in spending battle
Angela Rayner has finally agreed a deal with Rachel Reeves on how much money she will receive for house building and councils. The Deputy Prime Minister had been one of the last holdouts in an intense Cabinet battle over spending settlements. It leaves Home Secretary Yvette Cooper as the last remaining Cabinet minister to still be pushing for more money for the police. 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. The Department of Health is set to be the biggest winner in Ms Reeves’ spending review, with the NHS receiving a boost of up to £30 billion at the expense of other public services. 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.
cancel email WhatsApp link share Share bookmark Save
share cancel email WhatsApp link bookmark
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, 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 on 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 would 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 complicates 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.
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.