UK ministers have been ordered to search for cost-cutting reforms as the Chancellor plans to take “tough decisions” on welfare and spending.
Rachel Reeves and her team have formally started the process of compiling a pivotal review of public spending.
It comes after Reeves announced billions of pounds in spending cuts last month in what SNP Westminster leader Stephen Flynn (below) called a “new era of austerity”.
Despite these decisions, The Guardian reports that £16 billion is still needed to cover what was described as a £22bn black hole in the public finances left behind by the previous Tory government.
Chief Secretary to the Treasury Darren Jones has written to Cabinet ministers ordering them to find reforms and deploy technology that can save cash.
He warned funding would only be prioritised for the “first steps” announced by Keir Starmer – including launching a new border security command, reducing NHS waiting lists and teacher recruitment.
Health and education are both devolved matters in Scotland.
Jones said that all spending requests will be tested against whether they will help deliver these priorities by the new “mission boards” already set up in Whitehall by Starmer.
One Whitehall source told The Guardian: “The Labour government will have to take difficult decisions about where to spend money because of the state of the public finances left by the Conservatives.
“We are taking the tough decisions now so we can fix the foundations and deliver on the mandate of change we were elected on to rebuild Britain.”
Labour have pledged to have a balanced budget in terms of day-to-day spending, as well as to have debt falling in five years’ time.
Reeves is planning to slash fraud and error from the welfare system as well as to cut down on government consultancy contracts.
The Chancellor also previously said that taxes would likely be raised in the upcoming Autumn Budget.
However, she said Labour would stick to their election manifesto promises not to raise national insurance, income tax or VAT.
A spokesperson for the Treasury said: “The Chief Secretary has now written to departments, kicking off the spending review process to fix the foundations, so we can rebuild Britain and make every part of the country better off.”
