LONDON (Reuters) – Britain’s Office for Budget Responsibility will initiate a review into how a March budget held by the last government was prepared after the new finance minister said it would have led to a 22 billion pound ($28.27 billion) overspend.
Rachel Reeves announced spending cuts worth 13.5 billion pounds over the next two years, saying the scale of the overspend was unsustainable.
OBR Chair Richard Hughes said that he had been made aware of the scale of the overspend last week, and would review the preparation of departmental spending plans, known as Departmental Expenditure Limits (DEL), as a result.
“If a significant fraction of these pressures is ultimately accommodated through higher DEL spending in 2024-25, this would constitute one of the largest year ahead overspends against DEL forecasts outside of the pandemic years,” Hughes said in a letter to a parliamentary committee.
“Given the seriousness of this issue, I have initiated a review into the preparation of the DEL forecast in the March 2024 (fiscal outlook).”
($1 = 0.7781 pounds)
(Reporting by David Milliken and Suban Abdulla, writing by Alistair Smout; Editing by Kate Holton)
