Previous government should have reviewed spending plans, says top civil servant

Simon Case said the Conservatives’ failure to hold a spending review since 2021 had contributed to departments overspending their budgets.

Cabinet Secretary Simon Case has denied civil servants acted inappropriately in approving spending estimates the new Government later said contained a £22 billion black hole (James Manning/PA) (PA Wire)

The previous government’s decision not to set out spending plans for the coming years contributed to uncertainty about the public finances, Britain’s most senior civil servant has said.

In a letter to shadow chancellor Jeremy Hunt, Cabinet Secretary Simon Case said “sizeable in-year changes to spending plans in recent years” had been caused by the lack of a spending review “in the face of significant pressures which have materialised since budgets were set in 2021”.

That year saw the last spending review, in which the previous government set out its plans until 2024/25, but the Conservatives declined to set out further long-term plans before the election.

Since the election, Chancellor Rachel Reeves has accused her predecessor of leaving a £22 billion “black hole” in this year’s spending plans, with departments overspending their budgets and ministers making unfunded commitments.

Mr Case said: “The most effective way to transparently identify, quantify and address these pressures would have been to conduct a prompt spending review.”

He added that, “unlike previous years”, the new Government “has set out to Parliament the pressures that it is having to manage down and the actions it is taking to do so”.

Mr Case’s letter comes in reply to allegations from Mr Hunt disputing the £22 billion figure and saying it was “deeply troubling” that Ms Reeves’ claims appeared to contradict official spending estimates submitted to Parliament after the election.

Mr Case insisted that civil servants had acted “appropriately on the basis of decisions and assurances provided by ministers”.

He said the tight parliamentary timetable between the election and the delayed summer recess meant the Government had had to submit the estimates prepared by its predecessor or face “cash shortages over the summer which would have disrupted the provision of public services”.

Mr Hunt, who published the letter on X, formerly Twitter, said the claims did not vindicate the Government but only raised “more serious questions”.

He said: “If civil servants signed off estimates to Parliament that they knew were false, it is a breach of the Civil Service Code irrespective of any decision by the last government to hold a spending review.

“But if those estimates were not false – and the Cabinet Secretary says accounting officers acted appropriately – then Labour’s claim of a £22 billion ‘black hole’ is exposed as bogus.

“In reality it is a political device to justify tax rises – a political choice the Government made long before the election.”

Ms Reeves’ claims of a £22 billion “black hole” have prompted the Office of Budget Responsibility to review the adequacy of the information provided by the Treasury prior to this year’s Budget.

A Cabinet Office spokesperson said: “We do not comment on leaks.”

Speaking in the House of Commons, Conservative former minister Kit Malthouse used a point of order to raise concerns about information put before Parliament.

He said: “The one I’m most concerned about is whether the Chancellor of the Exchequer has knowingly misled the House of Commons as to the state of the public finances and her knowledge at the time.”

Deputy Speaker Caroline Nokes replied: “There are two separate points here. The first is one of privilege, and he should write to the Speaker making the point he is concerned that the Chancellor may have misled the House.

“The second point is the accuracies of the estimates, that is not a matter for the Speaker but it may be something he chooses to raise with the chair of the Public Accounts Committee when they are elected next week.”