Why the Treasury is facing a spending black hole

With the government tearing up fiscal rules, James Moore looks at where the spending pledges leave Britain

The delay to Sajid Javid's first budget means that the government has ducked publishing its borrowing forecasts (AFP)

Dominic Cummings must have thought he had good reason for telling the Treasury’s chief PR man Sajid Javid to delay his first budget: in theory there’d be no official forecasts for how much he’s planning to borrow on our behalf courtesy of the Office for Budgetary Responsibility. Oops. Turns out the OBR is sufficiently fed up of government prevaricating that it’s going to divulge the information outside of the normal cycle.

While we await them, the Resolution Foundation, an independent think tank, has put forward some estimates of its own. It thinks the Treasury is on target to overshoot its deficit target by £16bn this year. That’s a huge miss. It’s like Sergio Aguero stepping up to take a penalty for Manchester City and hitting the corner flag.

The reasons for this are various. A deteriorating economy (hello there, Brexit) including a slump in manufacturing and construction has led to disappointing tax receipts. There’s been a change to the accounting treatment of student loans. Then there’s the addition of £13bn to departmental spending plans for 2020-2021. In other words, a pre-election bribe. All have played a part.