The new chancellor of the exchequer has announced that the government will announce “difficult decisions” it has made in tax and spending as part of its first Budget in October.
In her first speech as chancellor, three weeks after taking office, Rachel Reeves announced that several of those decisions had already been taken.
This is because on her first day in the job, Treasury officials told her that the day-to-day spending announced by her predecessor in March’s spring Budget "wasn't even close" to the actual expected spending this year, with the total pressures on departmental spending amounting to £35 billion pounds.
Taking into account a £9 billion reserve and other factors, "this means we have inherited a projected overspend of £22 billion".
Reeves said she had accepted the independent pay review recommendations on public sector pay "in full", noting that this will cost an extra £9 billion that had not been funded under the previous government's Budget.
In order to try and plug the gap in spending, a number of infrastructure projects in the transport, health and other departments are to be shelved.
Reeves said the measures she outlined today to address the shortfall, as outlined in a Treasury report published today, will be worth £5.5 billion this year, and more than £8 billion next year.
The Stonehenge tunnel on the A303, the A27 Arundel bypass and the Restoring Our Railways scheme will be axed as there is no money to fund them, Reeves said.
Previous promises of 40 new hospitals will be reviewed, and reforms to the care sector have been cut to save £1 billion by the end of next year.
The proposed replacement of A-levels and T-levels called the Advanced British Standard qualification, has been scrapped due to £200 million annual cost.
Reeves said she has made the "difficult decision" to scrap winter fuel payments for pensioners who are not in receipt of pension credit, meaning these funds will only go to poorer pensioners.
She said a multi-year spending review is being launched to allow the government to plan for the longer-term
Final budgets for this year, and for next year, will be announced alongside the budget on 30 October, she said.