Westminster is bracing for a potentially contentious Spending Review as the government grapples with tight budgets and competing priorities. Chancellor Rachel Reeves is set to unveil what insiders are calling "the last big set of decisions" before the next general election, outlining government budgets through 2029. While health and defence are expected to receive significant funding increases, other departments face potential cuts, leading to what one Whitehall source describes as "ugly" internal battles.

The government insists it must "live within its means," signaling difficult decisions ahead. Although overall spending has increased due to tax rises, the focus on specific sectors like health and defence puts a squeeze on day-to-day spending for other public services. Despite the vast budgets, some government sources admit that "there are services in real danger." The Treasury aims to be tight with day-to-day spending but relatively generous with capital spending, prioritizing projects like new roads, power infrastructure, hospital buildings, and prison construction.

Departments providing essential public services, such as police, care for the vulnerable, and primary schools, are likely to feel the pressure. Tensions are also emerging over council budgets, affordable housing funding, support for deprived areas, home insulation budgets, and plans to improve police performance and reduce violence against women and girls. Even Downing Street is reportedly facing a hunt for savings.

Ministers are employing various tactics to protect their departments, with some sources reporting heated exchanges and disagreements. While some worry about the impact of these decisions on public services, others argue that some departments have "fat and waste" that can be trimmed. The government hopes to use the Spending Review and infrastructure plans to create a positive narrative after months of negative press.

Reeves' deputy, Darren Jones, aims to create "stories not spreadsheets" by highlighting the benefits of government initiatives in local areas. However, some sources caution that long-term projects may not resonate with voters as much as day-to-day spending. There's pressure to demonstrate tangible results within three and a half years.

Some within the government believe a clearer explanation of the need for savings is necessary to avoid political backlash. The review also raises questions about the future of the Prime Minister's "missions" and the government's reform agenda. An experienced Whitehall insider questions how to maintain political momentum in a climate of declining resources.

The Spending Review carries both potential rewards and risks for the government. While it offers an opportunity to shape public services and the country's future, it also risks highlighting political divisions and cuts. Some insiders question the timing of the review, suggesting it may simply import bad choices into Downing Street.

Ultimately, the financial choices made in the Spending Review will tell the government's political story, impacting the services available to the public and the overall fabric of the nation.