Inside Ipsos’ Spending Review Briefing

“The Ipsos Spending Review Briefing” brought together expert voices on economics, public finances, and public opinion, to explore what’s at stake in the imminent government Spending Review.

Led by Trinh Tu, Managing Director of Ipsos UK Public Affairs, the event framed the upcoming review as a moment of both urgency and opportunity. Amidst global volatility and public exhaustion, Trinh stressed how the Government needs to balance long-term issues with public reassurance.

The Big Picture: A Country Stuck in Slow Gear

James Smith, Research Director at the Resolution Foundation, set the economic scene with a sobering overview. His message? The UK’s underlying challenge isn’t new - it’s growth, or the lack thereof.

Ever since the 2008 financial crisis, slow growth has led to stagnating living standards and put public finances in a tricky position. This has caused stretched public services and fewer levers for the Government to pull, when it comes to delivering real change through their mission-driven approach.

But it’s not all bad news. James highlighted recent signs of economic momentum -  0.7% growth in Q1 2025, making the UK the fastest-growing G7 economy. Trade deals with the US, EU, and India have helped change the “mood music,” and of course they have already announced more spending since the election anyway, offering the Government a rare opportunity to tell a more optimistic narrative ahead of the Spending Review.

But optimism alone won’t pay for better public services. James reminded us that while this review will be tough, it also gives the Government a chance to reframe its credibility both on the economy and money for public services, through smart choices on current and investment spending.

Public Expectations and Labour’s Tightrope

Next came Gideon Skinner, Senior Director of UK Politics at Ipsos, who delivered fresh polling data (commissioned specifically for the webinar) that speaks volumes about public sentiment and the political minefield ahead.

The public mood? Gloomy.

73% believe the economy is in a poor state - of whom 56% blame Labour.  While Labour is still just about the most trusted party on the economy and public services, Reform UK is not far behind. This erosion of public trust is  in part due to the public not getting the change they wanted at the last election. Expectations of tax rises have increased since Labour took office, but hopes that this will lead to extra money being spent on public services have fallen.

When it comes to public services specifically, the public has a clear set of priorities: 

• NHS tops the list—63% want increased funding.
• Border and immigration control (25%) and older people’s social care (22%) follow.
• Areas the public want cut? Foreign aid (48%), non-pension benefits (23%), and universities (19%).

However, support for spending increases is qualified. Most want the NHS protected, but only if it can be done through efficiency savings. Around 45% believe this is possible, yet many are sceptical about whether such savings can truly be delivered without any negative impact. And if the quality of other public services suffers, support for more spending is much weaker, even in areas like the NHS and defence. 

[I most want to see] some way out of the hole we are in without making one thing or another worse. I don’t want to pay more tax but I don’t want public services, particularly the NHS, to suffer as it is already on its knees.

-    Verbatim response 

Voters want "a way out of the hole" but are split right down the middle on the key trade-offs, higher spending vs lower taxes or borrowing. This demand for a political magic trick - real improvements in public services and economic growth with no more pain in terms of tax rises - defines the dilemma for the Government heading into the review.

Key Decisions: The Hard Choices Ahead

Next up was Ben Zaranko, Associate Director at the Institute for Fiscal Studies (IFS), who walked us through the maths of the Spending Review. And it’s a balancing act like no other.

At the heart of it all? The NHS and Defence.

Whatever gets spent on the NHS will have major consequences for the overall budget. 

• If the NHS gets a generous increase (~3.4% - but still only in line with its long-run average), then almost everything else gets squeezed.
• A more modest rise (~1.2%) makes the maths easier for other public services, but risks failing to meet the Government’s promises on the NHS, such as on its Workforce Plan.

Defence, too, is in flux. The Strategic Defence Review, published this week, points toward a future built around tech and European engagement, but the key question is how much money follows. The UK is already on track to spend 2.5% of GDP on defence by 2028, but geopolitical pressure - NATO, the Trump presidency, European security, and from rival British political parties - may force further commitments.  But again, this would increase the pressure on spending on other public services (particularly on necessary capital investment).

Then comes the toughest question of all: What gets cut, and how? Ben floated two possible paths:

1. Efficiency and productivity improvements – Investing in tools, tech and systems to do more with less. This is of course sensible and should be pursued, but has realistic limitations. You can't automate human care, teaching, or many essential services.
2. Actual cuts – Shrinking or eliminating services, a politically painful but sometimes unavoidable step when budgets are tight.

Public sector pay and workforce strategy are inextricably linked to this, and are central to both service delivery and overall costs.

Finally, Ben reminded the audience that while the Government has relaxed its fiscal rules to enable more investment borrowing, prioritisation remains unavoidable. Not everything can go up, even though there is still lots of money to go round, and the opportunity for some good news stories for the Government. The Spending Review will be a test of what this Government truly values when the trade-offs get real.

Big Red Buttons: Health vs. Distributional Fairness

The discussion returned to James Smith, who honed in on one of the most weighty questions at the heart of this Spending Review: Who benefits from government spending?

Building on Ben’s fiscal framing, James laid out a clear trade-off the Government is currently facing - a choice between focusing almost entirely on boosting NHS spending, or using some of that money to make a more targeted difference for low- and middle-income families.

The Government, as he put it, is “hovering over two big red buttons.”

1. Pressing the “health spending” button means pouring funds into the NHS - an institution that benefits nearly all income groups. The advantage here is universal: whether you're rich or poor, everyone stands to gain, and politically, we know the NHS is a public priority.
2. But the second button, redistributing spending to lower-income households, could have more transformational effects for people in most need. Drawing from Resolution Foundation analysis, James pointed to services like social care, special educational needs provision, employment support for young people, and free school meals. These areas, while more targeted, have “chunky effects” for poorer households and can directly shift living standards where they’ve stagnated most since the financial crisis.

James concluded with a simple message: If the Government is serious about “missions” and boosting living standards, especially for those left behind, it needs to consider redistributive investment not just universal health spending.

Audience Q&A: Politics Meets Policy

With the core presentations concluded, Trinh Tu returned to the virtual stage to chair the audience Q&A. The questions revealed just how broad and pressing the public policy challenges are.

Some of the most thought-provoking questions included:

• Could we see a return to private finance?
• Can capital spending help address migration concerns?
• Is Net Zero missing? And what does the public really think?

To hear our expert panellists’ answers and watch the full presentations, watch the webinar recording here

Looking Ahead

The Ipsos Beyond the Bubble webinar made clear that the upcoming Spending Review is about far more than spreadsheets. It’s about big, value-driven, society-shaping choices.

Will the review show signs of a long-term strategy to improve public services, or will it be limited by the critical state of public finances?  What decisions will the Government take on the NHS and defence while not forgetting other key public services, on allocating long-term investment spending, on addressing the burden of the cost of living facing low and middle-income earners? 

As our experts pointed out, there is still scope for the Government to tell a more optimistic story about their plans, but with the public mood towards Labour less than positive, the pressure to get these decisions right has never been higher.

Want to dig deeper into the data? Access all the slides here

Stay tuned for more analysis as we track how the Government’s choices unfold, and what they reveal about its priorities in the months ahead.