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The chancellor has accused the Conservatives of hiding a £21.9bn authorities overspend this 12 months, as she set out a collection of spending cuts.
Rachel Reeves additionally warned that she would want to make “difficult decisions” on tax on the subsequent Budget, set for 30 October.
At the identical time, she has introduced pay offers for public servants, and a deal to settle the long-running pay dispute with junior medical doctors in England.
Shadow chancellor Jeremy Hunt has denounced the audit as a “shameless attempt to lay the ground for tax rises” later in the year.
Here is a summary of the main announcements.
The Treasury said it had identified a “forecast overspend” for this year of £21.9bn.
Ms Reeves said this represented spending over and above what was forecast at the time of the last Budget in March, including:
- £11.6bn to give public sector workers recommended pay rises that are bigger than the 2% budgeted for by the last government
- an extra £6.4bn on “undisclosed” asylum and immigration prices, and £1.5bn extra to cowl NHS pressures from strikes
- £1.7bn more in military support for Ukraine than was planned
- £1.6bn more in payments to private rail companies after a weaker than expected rebound in passenger demand after Covid
- higher than expected inflation since overall departmental budgets for this year were set in 2021.
Ms Reeves announced cuts worth £5.5bn this year, rising to £8.1bn next year, which she said were required to fill the shortfall, including:
- scrapping Winter Fuel Payments for around 10m pensioners who do not currently receive pension credit or other means-tested benefits
- scrapping a cap on the amount people in England pay for social care, scheduled to come into effect in October 2025
- cancelling a planned road tunnel under Stonehenge, the A27 Arundel bypass in Sussex, and ditching £76m to reopen previously closed rail lines
- cancelling plans for a new qualification to replace A-levels and T-levels in England, which Labour say was never allocated funding
- stopping “non important” government spending on consultants, and unspecified “administrative efficiencies” for the Civil Service
- scaling back government communication and marketing spending, and selling “surplus” public sector buildings and land.
The chancellor also announced pay deals for millions of public sector workers this year, accusing the previous government of sitting on the decision.
These decisions did not have to be announced today, but Labour says the Conservatives had ducked making a decision earlier this year.
- she has accepted advisory recommendations to give most NHS workers, teachers and members of the armed forces above-inflation pay rises of 5.5-6%
- she said the rises represented “the pay rise they deserve” and would ensure the government can recruit and retain staff
- the federal government has additionally provided junior medical doctors in England a two-year pay deal value 22% on common, in a bid to halt strike motion.
