"She added that any borrowing from the reserve - which amounted to £9 billion last year but is being halved in 2025 - would have to be repaid. The Reserve is intended for "genuinely unforeseen, unaffordable and unavoidable pressures" but has in recent years been used to fund public sector pay deals and compensation settlements."
"The Institute for Fiscal Studies has already cautioned that the Spending Review's reduction of the Reserve from a typical £14 billion a year leaves "little space to deal with unforeseen pressures.""
"At Tuesday's cabinet meeting, Reeves referenced recent bond market instability across advanced economies, stressing that "stability is more important than ever to underpin growth in a volatile global environment." She told ministers: "I do not think there is anything progressive about spending £100 billion a year on paying off debts accrued by previous governments. I would rather spend that money on cutting hospital waiting lists, tackling illegal migration and keeping our country safe.""
The Treasury Reserve will face much tighter access rules ahead of the autumn Budget, with departments required to maximise internal savings before drawing funds. Borrowing from the Reserve, which was £9 billion last year and is set to be halved in 2025, must be repaid. The Reserve is intended for genuinely unforeseen, unaffordable and unavoidable pressures but has recently funded pay deals and settlements. The Spending Review has reduced typical Reserve levels from about £14 billion, raising concerns about limited flexibility. The Chancellor emphasised stability and prioritised spending on public services and migration over debt repayment.
Read at Business Matters
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