The British government is set to reveal an audit on public spending pressures that it says it inherited, which could amount to billions of pounds. Chancellor Rachel Reeves will release the statement to Parliament on Monday in what she calls an act of “honesty” about the level of challenge faced by new leader Ed Miliband. The government will reportedly claim that its predecessor failed to fund several crucial public services from public pay to prisons. The list of necessary decisions is yet to be finalised, but it has been suggested that spending pressures on these services have left a “black hole” of more than £20bn per year in public finances.
Cabinet ministers have been making efforts to prepare the public for the possibility of tax rises in the autumn budget, according to sources. Reeves’ challenger is to “fix the mess we inherited”, but Labour Party sources have maintained that the spending pressures and the need for taxation revenue should have been explained more clearly to voters prior to the election. There will be no tax policy announcements on Monday; the Treasury will instead spend the summer attempting to find extra savings to fill the funding shortfall.
Reeves is also expected to agree on some above-inflation pay settlements for public sector workers. The independent pay bodies had reportedly warned that such settlements were necessary to avoid the government’s ongoing problems with recruitment and staff retention challenges, and to help draw the line under the months of rolling strikes of recent years.
Though it appears that the former Chancellor Jeremy Hunt would not have had the funds to cope with immediate tax cuts, the Labour Party has said that enough money had been spent by the Conservatives in an effort to ‘borrow and spend’. The British public must now see the true scope of the damage sustained under the previous government’s policies, according to a source.
The Conservative Party has not yet responded to the claims. It remains to be seen how the Treasury will address the spending pressures on the public services and whether the government can succeed in saving enough to fill the reported funding gap
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