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One of the earliest comments made by Rachel Reeves in her Budget statement yesterday (Wednesday, November 27, 2025) was that she had said Austerity was over and she meant it.

Is it?

Having used AI to analyse the OBR’s prematurely-released report on the Budget and what it means for ordinary citizens of the UK, I asked it to provide an opinion on whether that is true – and was surprised by the result.

My opinion was – and remains – that Austerity is not over, because funding for government departments has not returned to pre-2010 levels, the cuts have not been fully reversed and public sector pay has not been restored to pre-Austerity levels.

Here’s what the AI had to say:

What “austerity” has meant since 2010

• After 2010, under the then‑coalition and subsequent Conservative governments, the UK implemented an austerity programme characterised by sharp cuts to public spending, reductions in welfare, and lowered investment — justified by the need to reduce the budget deficit. Wikipedia+2The Guardian+2
• According to a left‑of‑centre think‑tank, government spending between 2010 and 2019 was cumulatively £540 billion lower than it might have been if pre‑2010 spending growth had continued. The Guardian
• These cuts or under‑spending had lasting effects: increases in poverty (especially child and working‑age poverty), pressures on public services, deteriorated housing conditions, rising debt and inequality. TUC+1

So, “austerity” in the UK context is more than just “budget‑cuts”: it refers to a decade of relative disinvestment — in welfare, public services, infrastructure — plus a social and economic legacy of strain, inequality, and weakened public provision.

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What’s new in 2025 that suggests austerity may be ending (or at least receding)

• According to a recent spending review under Reeves, departmental budgets are being increased in real terms: average increases of around 2.3 per cent per year are planned over the course of this parliament. The Guardian
• The government is also committing to higher capital investment — infrastructure, health, education, green projects — for the first time in many years. The Guardian+1
• In her 2025 Budget speech, Reeves explicitly rejected a return to austerity, stressing a mix of public investment, economic stability, and increased spending on services. Reuters+1
• The plan seeks “real‑terms growth in total spending,” which, by conventional economic definition, means spending rising faster than inflation and thus offering more resources compared with a period of cuts. The Guardian+1

In those terms — real spending growth, higher investment, and explicit political commitment — there is a credible case that the UK is formally exiting austerity.

But it’s not clear‑cut — there are big caveats and ongoing austerity‑like pressures

• Even if spending envelopes rise overall, not all departments benefit equally. Some areas — especially non‑protected services — may see cuts or flat budgets, which to those service users will feel a bit like austerity. The Guardian+1
• According to recent analysis, even with real‑terms growth in some departments, local government funding remains well below 2010 levels — meaning many public services at local level remain squeezed or degraded. House of Commons Library+1
• The economic and fiscal context remains tough: the latest forecasts from the Office for Budget Responsibility (OBR) show weaker growth ahead — meaning the Government’s room for manoeuvre depends heavily on assumptions about growth, productivity and revenue generation. Reuters+2Financial Times+2
• Also, some of the social‑welfare reforms are controversial — benefit and disability‑support cuts are being proposed alongside investment commitments. That means some households (especially vulnerable ones) may still feel the squeeze. The Independent+1

What this means for the claim “Austerity Is Over” — and for real people

Reeves’s declaration that “austerity is over” carries weight in one important respect: the headline fiscal stance has definitely shifted. After more than a decade of squeeze and cuts, the new spending plans do show real-terms increases for many departments, alongside renewed capital investment in health, education, infrastructure and green industries. In that sense, the era in which government policy was built around withdrawing resources from public services has ended.

But the picture for real people is more complicated.

For many public services — particularly those protected in the Budget — increased spending may begin to reverse the damage of the 2010s. The NHS, education, and major infrastructure programmes are set to receive more money, which should, over time, improve waiting lists, school conditions and basic transport and energy infrastructure. Households might benefit indirectly through better services, improved access to training and jobs, and stronger economic growth.

Yet for others, the experience may not feel like an end to austerity at all. Some departments are still effectively receiving “flat” settlements once inflation and demand pressures are taken into account, and local government — decimated since 2010 — remains far below pre-austerity resource levels. That means libraries, social care, youth services, homelessness support and local transport could continue to struggle, with frontline users seeing little improvement in the short term.

Low-income households, disabled people and others affected by welfare reforms may also feel little relief. While Reeves has rejected further welfare cuts, some changes already underway mean many vulnerable households could still experience financial pressure. For them, public services improving slightly in one area may not outweigh losses in their personal income or support.

There is also a wider economic question: whether the government’s investment-led approach can withstand weaker growth projections. The OBR has already signalled downward revisions for the late-2020s. If those trends persist, some of today’s promises may be eroded by future fiscal tightening — a softer form of austerity created by economic necessity rather than political design.

So while the government has clearly broken with the ideological austerity of the 2010-2019 period, the lived reality is uneven. Some people will see genuine improvement; others will continue to feel the long shadow of the past decade. In practical terms, this Budget marks a turning point — but not yet a full-scale return to the pre-2010 social state.

AI view: A “partial end” to austerity — real progress, but fragile

The 2025 Budget under Rachel Reeves does amount to a turning point: an attempt to shift away from austerity‑style policies, reinvest in key services and infrastructure, and rebuild the social contract between state and citizens.

However, I see this as a partial end — not a full return to pre‑2010 normality. The legacy of austerity (underfunded local services, increased inequality, benefit cuts) lingers. The new spending rises are real and important — but they’re still vulnerable to economic headwinds, political pressure, and tough trade‑offs.

If I were advising readers (or writing for them now), I’d say: “Yes — this government wants to bury austerity. But whether it truly ends depends on how well these investments are implemented, and whether the fiscal and economic conditions hold up.”

That is the opinion of artificial intelligence.

But what do you think? How will it affect you?

Tell us what your experience has been – and how you think it will change as a result of yesterday’s Budget.

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