UK government spending intended to reduce future costs will receive protection from being redirected to immediate needs under a new budget policy. The measure received only a short mention in John Healey’s speech and a single paragraph in the 166-page budget document, but could significantly change how departments plan and protect expenditure.
The protection will begin with the forthcoming spending review, which starts in 2027. Projects shown to generate future savings greater than their initial cost will be covered by a new category called a preventative departmental expenditure limit, or PDEL. The policy follows years in which money allocated for longer-term purposes was diverted to meet immediate pressures.
Prevention services were particularly affected during and after the austerity programme introduced by the 2010 coalition government. Among the services cut was Sure Start, which supported families with young children. The new framework is intended to stop qualifying budgets from being used to fill gaps elsewhere in departmental spending.
Stuart Hoddinott, of the Institute for Government, said the measure could substantially alter spending reviews and the wider spending framework. The thinktank had advocated such a system. Treasury officials also regard the change as significant, with one describing it as an “important reform”. However, the rules governing its application have yet to be established.
The budget cites Andy Burnham’s new spending on preventing rough sleeping as an example of expenditure that would qualify. Public health measures aimed at avoiding future illness and early years services similar to Sure Start also appear to be possible candidates. Departments are waiting for Treasury guidance, which has not yet been drafted, before they can determine what else might be covered.
Defining prevention could prove contentious. Hoddinott noted that arguments could be made for treating almost any spending as preventative. One government official suggested that the Ministry of Defence could theoretically make that case for its entire budget, given the costs of fighting or losing a war. Such arguments could create another source of negotiation between departments and the Treasury as ministers seek protection for favoured projects.
Although other governments protect individual preventative budgets, including public health spending, the approach is believed to be the first blanket policy of its kind. Officials describe it as part of a broader effort under Burnham to address neglected problems with lasting consequences, including rough sleeping and adult social care.
Greg Fell, Sheffield city council’s director of public health and president of the Association of Directors of Public Health, welcomed the move while highlighting unresolved questions. He said preventing future acute demand and creating conditions in which communities could thrive required different approaches. Some investments, he added, could take decades to produce benefits, making the policy’s implementation crucial.
