Prime Minister Andy Burnham has concluded his inaugural week in office, largely spent working from the new No 10 North in Manchester. During this period, Mr Burnham unveiled a series of spending commitments, primarily focused on alleviating the ongoing cost of living crisis, with a total estimated value of approximately £1.5 billion. UKPulse Media, drawing on analysis from BBC Verify, has examined the details of these pledges and the government's proposed methods for funding them.
Among the key announcements was a commitment to ending rough sleeping in England, which the government states will be delivered through £340 million of spending over five years. This funding, intended to support at least 3,000 individuals, is said to be drawn from existing 'uncommitted' budgets within the housing department. This means the Treasury had allocated funds to the department, but specific projects had not yet been assigned.
A significant measure announced on Tuesday was the cut in VAT from domestic electricity bills for the current financial year, estimated to save a typical household around £45 annually from the autumn. This policy carries an £850 million price tag for 2026-27. The government indicated this would be funded by scrapping the previous administration's digital ID scheme, which had an estimated cost of £1.8 billion over three years. However, the Office for Budget Responsibility previously highlighted that the digital ID scheme itself was 'unfunded', suggesting that while its cancellation reduces a spending pressure, it does not inherently pay for the VAT cut, which will require funding in the next budget.
Further pledges include a reduction in the bus fare cap across England (excluding London) from £3 to £2, set to begin on 1 January 2027. This initiative is expected to cost the Department for Transport over £500 million. The government plans to fund this primarily by converting grants for international climate projects into loans, anticipating repayment with interest. However, Max Warner from the Institute for Fiscal Studies has raised concerns regarding the clarity of expected repayment amounts and interest rates, introducing an element of uncertainty.
Finally, the government announced a 20% cut in business rates for pubs, clubs, and live music venues in England, effective from April 2027. This measure is projected to save a typical pub £1,100 and cost the Treasury around £100 million annually. While the government stated this would be 'fully funded', specific details were limited, with a portion of the cost expected to be met by 'reviewing reliefs for businesses that do not make a positive contribution to local communities, such as vape shops'. The previous Starmer government had already implemented a business rates support package for pubs, including a 15% cut for the current financial year.