Rishi Sunak, the Chancellor of the Exchequer, has announced a number of measures recently to provide valuable support to those struggling amid the lockdown crisis. His latest measure was a billion-pound financial package designed to protect and create jobs following announcements the government would be restarting the economy. However, the Chancellor now stands accused of cutting back on other previously planned projects to use this money for his new scheme.
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Analysis of Mr Sunak’s summer economic statement, undertaken by the Institute for Fiscal Studies (IFS), claimed up to a third of the money set aside in the new jobs package came from previously promised initiatives.
The Treasury stated the new economic statement provided up to £30billion of support.
But the IFS has said at least £8billion, and up to a third of this pledged money was found elsewhere.
The organisation has said the Chancellor’s so-called recycling of old money as new is “corrosive to trust”.
Paul Johnson, the director of the IFS, tweeted: “All that extra money announced by the government last week not quite what it seems.
“The ‘Rooseveltian’ additional £5.5billion of capital spending represents an increase of precisely zero this year on Budget plans.
“It is a reallocation from one set of projects to another.”
While the Treasury stated the package could be worth up to £30billion, this week the Office for Budget Responsibility (OBR) challenged this figure.
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The OBR, the government’s independent watchdog, has said the package is more likely to cost £20billion.
This is because not every employer will claim the bonus laid out by the government in its plans.
The IFS has now called for greater transparency from the government going forward.
David Phillips, associate director at the IFS, said: “A lack of transparency over where spending is expected to be lower is contributing to confusion about the overall scale of fiscal support being provided.
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“It makes scrutiny of plans more difficult and is corrosive to trust. While governments of all stripes will, of course, want to follow the adage of ‘repetition, repetition, repetition’ when it comes to highlighting the goodies they are funding, official policy documents should also be clear about when and where spending is expected to be lower than previously planned too.”
A spokesperson for the Treasury, however told Express.co.uk: “This suggestion is wrong. The Treasury has approved additional activity by departments as part of the Plan for Jobs.”
A tweet from the Treasury added: “It is true that some other projects are underspending across government – this is not unusual in normal times – and not surprising in a global pandemic.”
And a spokesperson added to The Times that the figures outlined by the Chancellor were not final, and would be costed later in the year.
The Chancellor announced his summer economic package last week, in an effort to provide further information on how the country plans to recover from lockdown.
Mr Sunak focused on job retention and creation, announcing additional financial support, rather than changes to taxes as many expected.
The announcement was not a full Budget, but did outline areas where the government would be stepping in to help.
It is expected the Autumn Budget will provide greater clarity on government spending, alongside any issues which may arise in the meantime.
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