Simon Case, the head of the civil service, has backed the government’s figures showing that a £22bn shortfall was left by the previous Conservative administration.
The cabinet secretary said the Tories’ failure to hold regular spending reviews had contributed to the financial uncertainty.
Case gave the assessment in a letter to Jeremy Hunt, the shadow chancellor, who had challenged the claims of a £22bn financial hole presented at the end of July by the chancellor, Rachel Reeves, saying it brought the civil service into disrepute.
Hunt had claimed that the £22bn claim appeared to be contradicted by government spending estimates signed off just days beforehand.
The letter, leaked to the BBC and later published in full by Hunt, said the discrepancy could be explained by a rushed parliamentary timetable. Case said he was satisfied that all civil service accounting officers had acted correctly in the estimates they had presented based on the assurances of ministers.
Case added: “I would also note that the sizeable in-year changes to spending plans in recent years have resulted from the lack of a new spending review to replan departmental budgets in the face of significant pressures which have materialised since budgets were set in 2021…
“By the time the election was called, we were in the final year of the 2021 spending review period. The most effective way to transparently identify, quantify and address those pressures would have been to conduct a prompt spending review.”
Case also said that “unlike previous years” the current government “has set out to parliament the pressures that it is having to manage down and the actions it is taking to do so”.
Hunt responded to the letter by saying it raised more questions than it answered.
“Far from vindicating the government, this letter raises more serious questions for them,” he wrote on X. “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 £22bn ‘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.”
