Chancellor John Healey has promised an overhaul of public spending controls, vowing that new rules to ringfence “preventative” programmes would save money further down the line. Healey said next year’s spending review would mark “a big long-term shift” by protecting investment that stops problems escalating with the creation of a new category of public spending.
“For too long, governments have spent more dealing with the consequences of problems rather than getting ahead of them,” Healey told the FT. “This leaves people worse off and taxpayers picking up a bigger bill.” He added that this would deliver better public services while getting better value for every pound spent.
Treasury officials have previously been sceptical about the idea of a so-called preventative departmental expenditure limit, or PDEL, and Rachel Reeves, the previous chancellor, did not adopt it. But Healey believes the PDEL would help reduce overall spending, with some Treasury insiders describing the move as “quietly radical”.
The change comes ahead of next year’s spending review — not likely until autumn 2027 — which will put Healey under pressure to find around £11bn a year for increased defence spending and billions more for stretched public services.
Source: Financial Times Companies · Summarized by HeadlinesBriefing