Spending

·       Changes to CDEL envelope. Increase capital spending by £13bn to support growth-enhancing investments, including infrastructure, housing, and defence innovation.

·       Planning – Changes to NPPF in December – contributed 0.2% GDP in 29/30 and £6.8bn extra. 0.6% GDP growth in next 10 years. 1.3 million new homes in next 5 years.

·       Invest £2bn in social and affordable homes over 2026–27. Deliver 18,000 homes and allow housing associations and local councils to bring bids forward for new developments. Further investment will be announced at the Spending Review.

·       Building Safety Levy. Introduce a levy from October 1, 2026, requiring most new residential developments in England to help fund building safety improvements. Exemptions include affordable housing, small developments (fewer than ten units), and previously developed land (50% reduced rate).

·       Universal Credit Standard Allowance. Increase the Universal Credit standard allowance for new and existing claimants above inflation from April 2026, reaching CPI +5 % from April 2029. The standard allowance weekly rate for a single person aged 25 and over will increase from £92 in 2025-26 to £106 in 2029–30.

·       Welfare fraud and error. Increase checks on potential Universal Credit claimants by introducing more ways to verify their savings as well as earnings and expenses, to save £200m in 2029–30. Recruit over 500 additional DWP fraud and error staff to correct errors in benefit claims, expected to save £40m in 2029–30.

·       High Income Child Benefit Charge (HICBC). Introduce a measure which means, from Summer 2025, affected individuals will be able to pay the charge via PAYE through a new digital service, removing the need to register for Self Assessment

Finances

·       £3.25bn investment in public services Transformation Fund to bring down costs of running Gov.

·       Create a £3.25bn Transformation Fund with:

o   £8m for new technology for probation officers.

o   £25m for the fostering system, including recruiting 400 new fostering households. o £42m for three Frontier AI Exemplars.

o   £150m for government employee exit schemes.

·       Covid fraud recovery retention. Improve incentives for Departments and Local Authorities to recover fraud from Covid schemes, with retention of fraud recovered to be agreed upon by Departments, Arm’s Length Bodies, Local Authorities, and HMT

·       Official Development Assistance (ODA) profile. Reduce ODA to 0.3% of GNI by 2027 to fund increased defence spending, in line with the Prime Minister’s earlier announcement • Defence 2025–26 uplift. The Ministry of Defence (MOD) will receive a £2.2bn increase in its budget for 2025–26.

·       2027 £6.4bn extra into defence spending. £2.2bn Ministry of Defence for next Fin Year.

·       UK Defence Innovation (UKDI). Speed up defence innovation, support the UK tech sector, and boost economic spillovers. It will launch by July 2025 with an initial £400m budget, set to rise in future years.

·       Novel technologies ringfence. Introduce a new technology ringfence, starting in 2025-26, requiring the MOD to spend at least 10% of its equipment budget on emerging technologies, such as AI, autonomous systems, and dual-use tech.

·       Min 10% on MOD equipment budget on new tech e.g. Drones and AI – manufacturing production in UK.

£400m protected budget in MOD – which will rise over time. Clear mandate to bring tech forward at speed

·       Defence procurement reform. Move to a new segmented procurement approach within the MoD with faster timelines:

o   Major platforms: 6 to 2 years

o   Modular upgrades: 3 to 1 year

o   Rapid commercial tech (e.g. drones / software): 3-month cycles

·       UKEF direct lending increase for UK Export Finance. Add £2bn to UK Export Finance’s (UKEF) direct lending capacity for defence exports, bringing the total to £10bn.

·       Growth and Defence Reform. Operate a new Defence Growth Board, co-chaired by the Chancellor and Defence Secretary from April 1, 2025

·       Additional HMRC debt management and compliance staff. Invest in HMRC staff, putting £114m over the next five years towards recruiting 600 debt management staff and over £100m over the next five years to recruit 500 HMRC compliance staff.

·       Making Tax Digital. Expand the rollout of Making Tax Digital (MTD) for income tax Self Assessment to sole traders and landlords with incomes over £20,000 from April 2028.

·       Late payment penalties. Increase late payment penalties for VAT taxpayers and income tax Self Assessment taxpayers as they join MTD, from April 2025 onwards, with rates of 3% of the tax outstanding where tax is overdue by 15 days, plus 3% where tax is overdue by 30 days, plus 10% per annum where tax is overdue by 31 days or more.

·       Direct recovery of tax debts. Re-start ‘direct recovery’ of tax debts by HMRC and explore options to automate the process for collecting lower value tax debts.

·       Making better use of third-party data. Launch a consultation on modernising how HMRC acquires and uses third-party data to make it easier for taxpayers to get tax right the first time.

·       Behavioural penalty reform. Launch a consultation on options to simplify and strengthen HMRC’s inaccuracy and failure to notify penalties.

·       Enhancing HMRC’s ability to tackle tax advisers facilitating non-compliance. Launch a consultation on options to enhance HMRC’s powers and sanctions against tax advisers who facilitate non-compliance.

·       Closing in on promoters of marketed tax avoidance. Launch a consultation on a package of measures to close in on promoters of marketed tax avoidance.

·       Duty and Stamp Duty Reserve Tax. Draft legislation has been published for consultation to exempt share transactions on the PISCES platform from Stamp Duty and Stamp Duty Reserve Tax.