The Cabinet Office has been allocated £50m to help it “increase workforce productivity” across the civil service as part of the Spending Review 2025 settlement.
Chancellor Rachel Reeves announced a £3.25bn “Transformation Fund” at March’s Spring Statement. While selected components were flagged at the time – such as match-funding for civil-service exit payments – a full breakdown of the total only emerged at Wednesday’s Spending Review.
According to the SR25 document, the Cabinet Office’s £50m uplift is aimed at “reforming the civil service, making it more productive and agile”. Among the expected productivity outcomes is a transformation of the current model of civil service learning and development and reducing “dependency on costly external training provision”.
The funding is allocated in two £25m tranches, planned for 2026-27 and 2027-28.
The SR25 document says the spending will “ensure civil servants are more skilled and better able to deliver on public priorities”.
The biggest single area covered by the Transformation Fund is the reform of special educational needs and disabilities funding for children, which is allocated £760m between 2026-27 and 2027-28. HM Treasury said the changes envisioned would “make the system more inclusive and improve outcomes for all children and young people”, with details to follow in a schools white paper this autumn.
Elsewhere, the Transformation Fund cash includes £555m for the Department for Education and the Ministry of Housing, Communities and Local Government to reform children’s social care.
HM Treasury said work would enable more children to stay with their families, “ensuring families have timely support and fixing the broken care market”.
Additionally, MHCLG will receive £100m from the Transformation Fund for early-intervention work to prevent homelessness.
HM Revenue and Customs is getting £298m from the Transformation Fund as part of work to improve customer services and IT. The allocation, split between 2026-27 and 2027-28, is part of a £500m investment in digital transformation at the department, designed to ensure that at least 90% of customer interactions are “digital self-serve" by 2029-30. As of 2025 the figure is 70%.
The Home Office will get £200m from the Transformation Fund to help end the use of asylum hotels over the course of the current parliament. The funding is also aimed at clearing the backlog of asylum claims, boosting appeals capacity and removing applicants with no right to be in the UK.
SR25 confirms that the Post Office, which is overseen by the Department for Business and Trade, will get £86m from the Transformation Fund for its investment plans – which include replacing the notorious Horizon computer system.
The uplift is part of broader £500m spending proposals for the Post Office contained in the SR25.