Hunt says Reeves’ ‘incorrect’ £22 billion black hole figure contradicts previous claims

Ex-chancellor asks cabinet secretary whether perm secs who signed off on main estimates will be sanctioned if figures are wrong

Jeremy Hunt has said the new Labour government's claims to have inherited a £22bn financial "black hole" amount to a serious criticism for departmental accounting officers who signed off on main estimates provided to parliament this month.

Hunt said his successor Rachel Reeves' assertions "directly contradict" Treasury figures provided to MPs two weeks ago and "risk bringing the civil service into disrepute".

In a letter to cabinet secretary Simon Case published on X last night, Hunt said that either the main estimates presented to parliament on 17 July and signed off by senior civil servants were wrong, or Reeves's Fixing the Foundations statement on the public finances was.

The former chancellor said he had "deep concern" over the conflicting claims. He asked Case to confirm that senior civil servants had signed off on the main estimates and questioned whether accounting officers – usually departmental permanent secretaries – would face sanctions for signing off on "wrong" estimates, if that turned out to be the case.

Hunt also asked Case for his views on the difference between the estimates and the figures presented to parliament by Reeves yesterday.

"These estimates and the bill simply set out the spending plans as outlined by the previous government, which the chancellor told the House today are 'unforgivable' and led to a supposed multi-billion-pound black hole," Hunt said.

"The numbers contained within estimates have all been signed off by permanent secretaries across Whitehall, including the permanent secretary in the Treasury.

"The estimates guidance manual is clear that 'Departments are responsible for ... ensuring that estimates are consistent with their best forecast of requirements'. Yet the chancellor is saying that these forecasts of requirements are wrong and that therefore senior civil servants are wrong."

Hunt said his concerns required urgent answers.

Reeves was asked about the letter on BBC Radio 4's Today programme this morning. She said the Sunak administration delayed publication of the main estimates because of the general election and that introducing them to parliament had been necessary to keep public sector funding flowing.

"He knows that the previous government should have published the main estimates before the last election," she said of Hunt. "They're usually published in April or May. The last government didn't publish them and we needed to publish them at the earliest possible opportunity, that was 17 July, to ensure that our public services were able to spend money over the summer.

"We are now updating the House and updating the country on the true state of the public finances."

Reeves said supplementary estimates would be published "later in the year".

After Reeves's statement to parliament yesterday, Institute for Fiscal Studies director Paul Johnson said the new chancellor was "within her rights to feel somewhat aggrieved" at the true state of the nation's finances.

"It was always clear and obvious that the spending plans she inherited were incompatible with Labour’s ambitions for public services, and that more cash would be required eventually," he said. "But the extent of the in-year funding pressures does genuinely appear to be greater than could be discerned from the outside, which only adds to the scale of the problem."

IFS economist Ben Zaranko flagged the Home Office section of a parliamentary briefing on this month's main estimates as an example of a department recognising that its spending plans were incomplete.

The section said the department acknowledged that £1.5bn allocated for expected pressures in the asylum system would not be enough and that unspecified "additional funds" would need to be drawn down.

"It does seem a bit ridiculous that the Home Office has submitted main estimates to parliament that officials themselves acknowledge will be insufficient to deal with costs of asylum support this year (despite being told off last year for the same thing)," Zaranko wrote on X.

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