Home secretary yet to agree deal days before spending review

Home Secretary Yvette Cooper has still yet to agree a deal with the Treasury before Wednesday’s Spending Review, despite an offer of above inflation increases to police funding in each of the next three years.

Ministers have been locked in talks with Rachel Reeves and her team ahead of the major financial statement, which sets out how much money the Chancellor has chosen to give departments for day-to-day spending, and investment.

Cooper is the sole remaining cabinet minister yet to settle her department’s budget through to 2029.

Housing Secretary Angela Rayner reached a deal with Reeves and the Treasury on Sunday evening.

The Home Office are arguing privately that police numbers must at the very least be maintained for the government to deliver its policy commitments on neighbourhood policing, but that under the current spending proposals this would not be possible.

A string of police chiefs including Sir Mark Rowley, the commissioner of the Metropolitan Police, have been publicly lobbying the government for more money in recent weeks.

A Treasury source said that the proposal for real-terms increases in police spending preceded Rowley’s interventions, however.

The impasse raises the possibility that the Treasury may have to “impose” a settlement on the Home Office prior to Wednesday.

Some in government argue that Cooper would have received a better deal had she settled earlier, pointing to the early deal struck by Shabana Mahmood, the justice secretary, who secured more money for prisons than the Treasury had originally proposed.

An ally of Cooper said that she had followed the Treasury’s timetable for negotiations and that “it should not be first up, best dressed”.

On Monday, the heads of the two bodies representing ordinary police officers warned the police service is “broken” as forces lose officers to budget cuts.

In a joint article for The Telegraph, President of the Police Superintendents’ Association Nick Smart, and Tiff Lynch, acting national chairman for the Police Federation of England and Wales, said police morale has been “crushed”.

“Police forces across the country are being forced to shed officers and staff to deliver savings,” they wrote.

Technology Secretary Peter Kyle has said police needed to “do their bit” towards reforming public services.

Kyle told the BBC’s Sunday with Laura Kuenssberg that “every part of society was struggling” and that the chancellor was facing pressure from all departments for additional funding.

He said the review would boost spending for schools and scientific research but declined to rule out a squeeze on policing.

The last-minute talks come ahead of what is set to be a highly significant week for every part of government.

It is expected there will be extra money for the NHS, with reports the Department for Health will receive increased funding.

But a substantial increase in funding for the NHS would come at the expense of other parts of government, as the chancellor seeks to meet her own fiscal rules, which are not to borrow to fund day-to-day spending, and for debt to be falling as a share of national income by 2029/30.

Further elements of what will be included in the statement have emerged in recent days.

On Sunday night, the government announced £24m funding to boost artificial intelligence lessons in schools, as part of a wider £187m package to boost tech skills across the economy.

Earlier on Sunday, the government announced an £86bn package for science and technology to help fund drug treatments and longer-lasting batteries.

And on Wednesday, the chancellor unveiled a £15.6bn package to fund extensions to trams, trains and buses in Greater Manchester, the Midlands and the North East.

Spending decisions come against the backdrop of a broad commitment to increase defence spending further to 3% by 2034.

The government has already committed to increasing defence spending from 2.3% of gross domestic product (GDP) to 2.5% by 2027 – an extra £5bn a year – funded by a cut in the overseas aid budget.

Reeves has previously confirmed the government will revise its controversial decision to limit Winter Fuel Payments to those in receipt of means-tested benefits.

While the government is expected to share some information about who will receive the payment as part of the Spending Review, full details will not be released until the Budget later in the year.

The Institute for Fiscal Studies has said “relatively modest” growth rates mean “sharp trade-offs are unavoidable”.

The think tank said the level of spending on health would dictate whether cuts were made to “unprotected” areas – those outside the NHS, defence and schools.

Liberal Democrat leader Sir Ed Davey has urged the chancellor to rule out cuts to social care, which is financed through local councils.

“You won’t get NHS waiting lists down, people out of hospital back in to social care or their own homes unless you have that investment in care,” he told the BBC’s Today programme.

He also said the government would have “more money in the pot, more growth, more revenue” if it pursued closer trading ties with Europe.