The government’s most anticipated announcement since last summer’s election win will be delivered by Chancellor Rachel Reeves on Wednesday.
At lunchtime on Wednesday, the Chancellor will unveil the government’s plans for allocating taxpayer money in the much-anticipated Spending Review. This is a major moment, as Rachel Reeves will outline how around £600 billion will be distributed over the coming years.
The review covers two key areas: day-to-day operational spending, which funds the regular running of public services, and capital investment, which supports major infrastructure projects such as transport networks, new schools, and hospitals.
Here in Merseyside, there was significant excitement among local political leaders at the prospect of having a government aligned with them politically for the first time in 14 years. This shift has raised hopes for increased investment in the region.
Spending Review: What’s Confirmed and What’s Still to Come for Merseyside
In the lead-up to this week’s major announcement, we already have a good idea of what Merseyside is likely to receive, although some details remain uncertain. In this news piece, we examine what has been confirmed thus far and what remains to be revealed.
Rachel Reeves will place a strong emphasis on transport in her speech on Wednesday, and much of what she plans to announce is already known.
The Chancellor will confirm a central £15.6 billion fund for local transport projects outside of London, with a strong focus on the North.
Details released last week revealed that £1.6 billion of this funding will go to the Liverpool City Region. This investment will help fund a new bus fleet, supporting the region’s effort to bring bus services back under public control. Learn more about the Government’s Plan for Change here.
Mayor Steve Rotheram is also expected to use part of this funding for his proposed rapid bus transit system, often referred to as a ‘Glider’. The Treasury has stated that £100 million will be made available to create new routes to key locations, such as Liverpool John Lennon Airport, Anfield Stadium, and Everton’s new stadium at Bramley-Moore Dock.
Big Questions Remain on Rail Funding and Welfare Reform
Last week also brought news that the Chancellor is likely to provide significant funding for a major project to deliver a faster rail link between Liverpool and Manchester. This is a long-standing ambition of Mayor Rotheram and Greater Manchester Mayor Andy Burnham.
What remains unclear is precisely how much funding will be committed to the rail project, although reports indicate that it will exceed the initial funding allocated for early-stage development.
One of the most closely watched policy areas for struggling families in Merseyside is the two-child benefit cap. Introduced by the Conservatives in 2017, this rule limits Universal Credit and Child Tax Credit support to two children per household. Many campaigners argue that removing the cap would immediately lift 350,000 children out of poverty.
Welfare Reform and Child Poverty: Key Announcements Awaited in Spending Review
While Labour did not commit to scrapping the cap in its election manifesto, the Prime Minister has recently shown signs of reconsideration. Last week, he declined to rule out its removal. Whether this signals a policy shift to be included in the upcoming Spending Review remains uncertain.
Another major announcement expected on Wednesday is the expansion of free school meals. The Chancellor will confirm that children in families receiving Universal Credit will now qualify for free school meals. This change will benefit around 500,000 children across the country, including many in Merseyside. The government believes this measure could help lift 100,000 children out of poverty.
In addition to support for families, the Chancellor is also expected to outline plans to boost the science and technology sectors with an £86 billion package aimed at stimulating economic growth. A press release ahead of the Spending Review specifically mentioned Liverpool.
As part of this strategy, the Chancellor will confirm that each of the seven mayoral combined authorities in England, including the Liverpool City Region, will receive at least £30 million in dedicated funding. In Liverpool, this money will support the city’s growing life sciences sector, helping to accelerate the development of new and vital medicines. Learn more about Liverpool Regeneration in our guidebook.
Recommended View – Laura Kuenssberg – BBC Interview with Labour Officials
£12 Million Grant for The Tate Gallery
A major investment package, including tens of millions of pounds in government funding, is set to support the redevelopment of one of Liverpool’s most iconic cultural institutions. Tate Liverpool has announced it will receive a substantial contribution from the Department for Culture, Media and Sport (DCMS) to support the transformation of its gallery at the Royal Albert Dock.
The £12 million grant comes from the Public Bodies Infrastructure Fund and will be combined with generous philanthropic support from the Garfield Weston Foundation and The Ross Warburton Charitable Trust. The project has now entered the final stage of fundraising ahead of the gallery’s planned reopening in 2027.
Spending Review Summary
This announcement forms part of a more exhaustive government Spending Review expected to outline how approximately £600 billion will be allocated over the coming years. Key areas of focus include transport infrastructure, science and technology, education, and child poverty. For Liverpool and the wider region, the review is set to bring significant investment in public transport, life sciences, cultural institutions, and expanded support for families through initiatives such as extended free school meals.
Learn more about What Urban Regeneration in the UK looks like!