The Home Office remains locked in negotiations with the Treasury over its budget with time running out before the spending review.
Rachel Reeves is expected to announce above-inflation increases in the policing budget when she sets out her spending plans for the next three years on Wednesday.
But Home Secretary Yvette Cooper is yet to agree a final settlement with the Chancellor, with reports suggesting greater police spending will mean a squeeze on other areas of her department’s budget.
Downing Street is now understood to be involved in the talks, with Ms Cooper the last minister still to reach a deal with the Treasury.
The spending review is expected to see funding increases for the NHS, schools and defence along with a number of infrastructure projects as the Chancellor shares out some £113 billion freed up by looser borrowing rules.
But other areas could face cuts as she seeks to balance manifesto commitments with more recent pledges, such as a hike in defence spending, while meeting her fiscal rules that promise to match day-to-day spending with revenues.
On Monday morning, technology minister Sir Chris Bryant insisted that the spending review would not see a return to austerity, telling Times Radio that period was “over”.
But he acknowledged that some parts of the budget would be “much more stretched” and “difficult”.
One of those areas could be London, where Sir Sadiq Khan’s office is concerned the spending review will include no new projects or funding for the capital.
The mayor had been seeking extensions to the Docklands Light Railway and Bakerloo Underground line, along with powers to introduce a tourist levy and a substantial increase in funding for the Metropolitan Police, but his office now expects none of these will be approved.
A source close to the Mayor said ministers “must not return to the damaging, anti-London approach of the last government”, adding this would harm both London’s public services and “jobs and growth across the country”.
They said: “Sadiq will always stand up for London and has been clear it would be unacceptable if there are no major infrastructure projects for London announced in the spending review and the Met doesn’t get the funding it needs.
“We need backing for London as a global city that’s pro-business, safe and well-connected.”
For too long, communities across the country have been locked out of the investment they deserve.
— HM Treasury (@hmtreasury) June 6, 2025
That's why on Wednesday, we announced funding worth £15.6bn, helping to drive cities, towns, and communities forward. pic.twitter.com/SJ41aeSZJz
Last week, Ms Reeves acknowledged she had been forced to turn down requests for funding for projects she would have wanted to back, in a sign of the behind-the-scenes wrangling over her spending review.
The Department of Health is set to be the biggest winner, with the NHS expected to receive a boost of up to £30 billion at the expense of other public services.
Meanwhile, day-to-day funding for schools is expected to increase by £4.5 billion by 2028-9 compared with the 2025-6 core budget, which was published in the spring statement.
Elsewhere, the Government has committed to spend 2.5% of gross domestic product on defence from April 2027, with a goal of increasing that to 3% over the next parliament – a timetable which could stretch to 2034.
Ms Reeves’ plans will also include an £86 billion package for science and technology research and development.
