The Chancellor of the Exchequer, Rachel Reeves, is set to deliver the UK’s Spring Statement on Wednesday, March 26, 2025.
A lot has evolved since the Chancellor delivered her inaugural Autumn Budget in 2024, especially geopolitically with the new Trump administration and the softening of the US towards Russia.
Since the Autumn Budget, business sentiment in the UK has weakened, with concerns from the business community around upcoming tax increases and an above-inflation rise in the national minimum wage which take effect in April, not to mention increased business rates bills which are currently landing.
With this backdrop in mind, what can we expect to be announced in the Spring Statement? Charlie Nicholson, Regional Managing Partner for Surrey, explores.
Public spending and efficiency measures
The government aims to reduce administrative costs by 15% by 2030, potentially resulting in the elimination of approximately 10,000 civil service positions. This initiative is part of a broader strategy to save £2 billion and enhance efficiency within government departments.
We will be monitoring developments here carefully, with our local authority and wider public sector clients in mind.
Infrastructure and local government funding
The government plans to allocate £4.8 billion to roads and highways, with £1.6 billion specifically tied to local councils for pothole repairs. This funding will be contingent on councils’ reporting and performance.
Economic forecasts
The Office for Budget Responsibility (OBR) is likely to lower its GDP growth forecast for 2025, reflecting modest economic performance since mid-2024.
Business sentiment has weakened due to upcoming tax increases and above-inflation rises in the minimum wage, both taking effect in April.
We can expect a cautious outlook from businesses for the rest of the year ahead, which could impact the commercial property market in particular, as business assess their investment decisions.
Taxation and fiscal policies
While the Chancellor has ruled out further tax increases, there is speculation about extending the freeze on tax thresholds beyond 2028.
Meanwhile, changes to inheritance tax and Individual Savings Accounts (ISAs) may also be introduced. The government is also considering expanding VAT on private school fees and private healthcare.
Welfare reforms
Significant welfare reforms are expected, with plans to cut welfare spending by billions of pounds.
These reforms may include changes to Personal Independence Payments (PIP) and other benefits, aiming to reduce the welfare bill by encouraging more individuals into work. However, these proposals have sparked concern among charities and some Members of Parliament, who fear the impact on vulnerable populations.
Whilst this summary is an overarching review of what is anticipated to be announced based on current reports and analyses, we will of course be monitoring what happens on the day.
We will bring you more around the potential impact for the public sector and wider property market, as well as the effect of any announcement on the business community.
In the meantime, for help and support on business rates mitigation, don’t hesitate to get in touch.
