Only the government is to blame for uncertainty over spending plans  

Despite repeated questioning from the committee, Sunak avoided providing clarity on how topline spending plans will translate into departmental settlements after March 2025. He said that annual spending increases have “not been divvied up into various departments, and that is what spending reviews are for. Necessarily, government will prioritise at that moment”.  

This would be a more convincing argument if it was impossible for his government to provide more details. But that is not the case. The government has made a choice to provide headline spending increases (approximately 1% annual real terms increases in day-to-day spending) but not to provide details about how those plans break down at a departmental level. With a potential autumn election, it would be possible for the government to run a single-year spending round over the summer, even if that would have been overturned by an incoming government. There is a good reason the government didn’t do this: providing spending details would reveal politically unpalatable outcomes and allows them to cut taxes in the short-term while still meeting their debt fiscal rule.

There are two potential paths for the government with the current post 2024/25 spending plans. Either it can meet its commitments on the NHS, childcare, defence, and foreign aid and consequently impose real terms cuts of -3% per head per year on areas such as local government and the criminal justice system. Or it can distribute spending more evenly and break those commitments. The true reason for not clarifying spending allocations is because doing so would shatter the fiscal illusion that Sunak and his government have worked so hard to create, and on which he hopes to fight the election.