Healey's first budget introduces a new limit for preventive spending
Chancellor John Healey announced a new category of government spending, the preventative departmental expenditure limit, in his first Budget as UK chancellor. The term is pronounced "P-Del." Healey presented the Budget to Parliament on 28 October 2026, and the full document was published the same day.
The Treasury plans to ringfence, or protect, money for preventive policies, meaning measures meant to stop problems before they become more costly. The protection would apply ahead of next year's spending review, the process that sets how much each government department can spend. According to the policy's description, PDEL is intended to classify, protect and grow prevention spending across government.
In Treasury spending review documents, PDEL will sit alongside two existing categories. RDEL covers the day-to-day, or "resource," spending of each department. CDEL covers investment spending.
The idea predates the budget. The think tank Demos introduced it in a 2023 paper, which identified £22bn of costs to government that it claimed could have been averted by preventive programmes.
The fiscal backdrop is tight. Healey warned of global "economic storms" in his budget speech, according to Bloomberg. The Institute for Fiscal Studies, a research body, described next year's spending review as "brutal." Bloomberg reported that the budget set a date for defence investment.
Healey said the budget would raise taxes on banks, gambling, savers and landlords. It also tightened value-added tax (VAT, a tax on most goods and services) rules for online marketplaces. Reuters reported that the pound was steady after what it called Healey's "continuity budget."
Bloomberg reported that the headroom, the margin against Healey's fiscal rules (the government's own targets for public finances), was reduced to £15 billion from the £24 billion left by his predecessor. Healey also said the budget would include measures to reduce the regulatory burden on businesses, such as simplifying corporate reporting.
