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The UK Treasury is refusing to provide key details of the £22bn fiscal “black hole” that chancellor Rachel Reeves claims to have discovered, with officials insisting they need more time to ensure the figures are accurate.
The Treasury’s stance will fuel doubts about the transparency of the Labour government, which has also refused to publish an assessment of the impact of means-testing winter fuel payments on 10mn pensioners.
Reeves has repeatedly brandished a near-£22bn departmental overspend in 2024-25 as evidence of irresponsible budget management by the Conservatives, paving the way for tax increases and spending cuts in next month’s Budget.
At prime minister’s questions in the House of Commons on Wednesday, Prime Minister Sir Keir Starmer repeatedly referred to the £22bn “black hole” as fact.
A Treasury document released at the end of July outlined the £22bn of “spending pressures”, in which Reeves accused former Tory chancellor Jeremy Hunt of covering up the true state of the UK public finances before the July general election.
But while government has given details of some categories, such as £9.4bn of public sector pay awards and a massive spending overshoot on asylum, the document did not provide a full breakdown of others.
A freedom of information request by the Financial Times asking for an exact breakdown of the figures was declined.
The response from the Treasury’s information rights unit said details would be published respecting agreed timelines “to allow the relevant officials time to complete the preparation of the information to ensure it is accurate and correct prior to publication”.
The largest chunk of unaccounted spending is £8.6bn earmarked for “normal reserve claims”.
The Treasury has said the £8.6bn includes items such as election funding, reclassification of the flood defences programme, and resettlement arrangements from Afghanistan — but has failed to quantify them.
Tom Pope at the Institute for Government think-tank said it was “not unreasonable” to expect the Treasury to give details of the reserve claims, given that other components of the £22bn had been itemised.
He added however that the Treasury may be hoping to shift some of the spending to other departmental budgets, and that officials therefore “want to keep discussions about this behind closed doors”.
Ben Zaranko at the Institute for Fiscal Studies think-tank said the government had “not been particularly transparent” about the details of normal reserve claims. “They probably ought to be at some point.”
In its letter to the FT, the Treasury said issuing further information about the overspend in a piecemeal fashion would damage departmental relationships, given the need for officials to find ways of mitigating such spending pressures.
“A release in line with this request risks creating a chilling effect, as officials and ministers feel less able to make free and frank decisions relating to ongoing discussions to manage down in-year pressures,” the Treasury said, adding that this could ultimately damage the value for money for taxpayers.
A spokesperson added the Treasury intends to provide more details of the overspending, either at the Budget or in separate spending releases.
“As with all publications, there are standard processes to ensure these documents are ready for publication,” the spokesperson said. “This should not be taken to imply that there is any doubt over the £21.9bn figure.”
Hunt, who is now Tory shadow chancellor, said the refusal to give more details proved the £22bn black hole was “fictitious”.
“It is starting to look like most of the ‘black hole’ is simply a pretext for funding public sector pay awards through tax rises rather than the productivity improvements planned by the previous government,” he added.
The detailed drivers of the overspend are significant, given Reeves’s insistence that she did not know about the budget problems until she took office.
One of the biggest disclosed components was £6.4bn of spending on asylum and illegal immigration.
But Labour publicly warned before the election that the Conservatives had spent billions more than planned on asylum, prompting critics to say Reeves was already aware of problems in this area.
The largest unfunded commitment was £9.4bn the chancellor incurred by honouring in full public sector pay awards of between 5 per cent and 6 per cent proposed by independent review bodies.
On Wednesday, Starmer used the £22bn figure to justify “painful” decisions the government is taking, including a £1.5bn cut in winter fuel payments.
Rishi Sunak, Conservative party leader, repeatedly pressed Starmer to release an impact assessment to show how many vulnerable pensioners the Treasury thought might die as a result of the policy.
Downing Street declined to comment on whether an impact assessment had been carried out or whether it would be published.
Sunak noted that Labour in opposition in 2017 had claimed that means-testing winter fuel payments could cost the lives of almost 4,000 pensioners.
