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No 10 Downing Street<\/span><\/div>\n<\/div>\n<\/figure>\nSir Keir Starmer has blamed the Conservatives for leaving a “\u00a322bn black hole” in the public finances during Prime Minister’s Questions.<\/b><\/p>\n
Government ministers have repeatedly used the figure to justify the decision to cut the winter fuel payment, while the Labour leader has also warned that October’s Budget will be “painful”.<\/p>\n
But economists say the state of the public finances should not have come as a complete surprise to the Labour government, arguing some of the pressures should have been anticipated.<\/p>\n<\/div>\n
Where does the \u00a322bn claim come from?<\/h2>\n<\/p>\n\nThe \u00a321.9bn figure was in an audit published by the Treasury at the end of July<\/a> \u2013 just a few weeks after Labour came to power.<\/p>\nThe document looked at areas of public spending which are set to go over budget this year, including: <\/p>\n
\n- Public sector pay rises<\/li>\n
- Overspending on certain projects, such as supporting the asylum system<\/li>\n
- Unforeseen costs, such as inflation being higher than expected<\/li>\n
- Military assistance to Ukraine<\/li>\n<\/ul>\n
To put the figure into context, in the Spring Budget<\/a> it was expected that total public spending this year would be \u00a31,226bn. The \u00a322bn is a small proportion of that.<\/p>\nBut Gemma Tetlow from the Institute for Government think tank told BBC More or Less: “looking back at history and the amount that the government tends to overspend its budgets in previous years, \u00a322bn would be quite a large number”.<\/p>\n
To cover some of the shortfall, Chancellor Rachel Reeves made several announcements<\/a>:<\/p>\n\n- Ending winter fuel payments for those not receiving pension credit<\/li>\n
- Cancelling infrastructure projects, such as the road tunnel near Stonehenge<\/li>\n
- Scrapping previous government measures, such as the planned cap on social care charges from October 2025.<\/li>\n<\/ul>\n<\/div>\n
Was the government aware of the overspend?<\/h2>\n<\/p>\n\nIt is true that some aspects of spending have come as a surprise.<\/p>\n
According to the Institute for Fiscal Studies (IFS) – an independent think tank – Ms Reeves was right to say that nearly all the estimated \u00a36.4bn cost of supporting the asylum system was unfunded, for example.<\/p>\n
The \u00a321.9bn figure was in an audit published by the Treasury at the end of July<\/a> \u2013 just a few weeks after Labour came to power.<\/p>\n The document looked at areas of public spending which are set to go over budget this year, including: <\/p>\n To put the figure into context, in the Spring Budget<\/a> it was expected that total public spending this year would be \u00a31,226bn. The \u00a322bn is a small proportion of that.<\/p>\n But Gemma Tetlow from the Institute for Government think tank told BBC More or Less: “looking back at history and the amount that the government tends to overspend its budgets in previous years, \u00a322bn would be quite a large number”.<\/p>\n To cover some of the shortfall, Chancellor Rachel Reeves made several announcements<\/a>:<\/p>\n It is true that some aspects of spending have come as a surprise.<\/p>\n According to the Institute for Fiscal Studies (IFS) – an independent think tank – Ms Reeves was right to say that nearly all the estimated \u00a36.4bn cost of supporting the asylum system was unfunded, for example.<\/p>\n\n
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Was the government aware of the overspend?<\/h2>\n<\/p>\n
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