The UK will create a protected budget category for preventive programs at its 2027 spending review, but the Treasury has yet to define eligibility or set its funding level.
Chancellor John Healey announced the measure in his Oct. 28 budget speech under the name Preventative Departmental Expenditure Limits (PDEL). The Treasury says the category is designed to support shared resources and accountability across budget holders, while protecting programs whose benefits take longer to emerge.
The budget points to an additional £432 million for rough-sleeping support in England across 2027-28 and 2028-29 as an example of preventive spending. It estimates the annual fiscal cost of each person sleeping rough at about £14,000, but does not say how much of that cost the funding would avoid.
The Treasury also lowered the Green Book appraisal discount rate from 3.5% to 3.0%. It says the lower rate will make long-term returns count more in project appraisals.
The Institute for Government argues that pressure to show near-term results can sideline preventive programs, particularly when the service paying for an intervention is not the one that later benefits. Programme Director Nick Davies and Associate Director Stuart Hoddinott said a working definition would be “crucial to prevent substantial amounts of gaming.” The institute says local authorities, National Health Service bodies, schools and police would also need incentives to make prevention a priority in local services.
The Office for Budget Responsibility (OBR) said that, under the government’s spending assumptions, day-to-day budgets in unprotected areas would need to be £11 billion higher in 2031-32 to avoid a real-terms decline from 2028-29. The estimate takes account of commitments including health, defense and schools, highlighting the pressure that could compete with new preventive spending.
The 2027 spending review is the next scheduled decision point for PDEL. The budget leaves eligibility criteria, allocation rules and the total funding level to be set later.
