Chancellor Rachel Reeves has delivered a speech outlining the state of public finances, highlighting a 'black hole' but also offering public sector pay rises.
The government says it has uncovered a £22 billion hole in public spending.
According to Reeves, the spring budget published by the previous government did not account for all government spending for the year ahead. As well as this, future spending like infected blood compensation was not included.
Reeves has accused the previous government of not being transparent over spending across the public sector.
Reeves criticised the previous government for not giving evidence to public sector pay review bodies on affordability.
The New Hospitals Programme will be reset, with currently only 6 hospitals having started their main construction activity and fewer than half of the total 40 starting any kind of construction.
Social Care charging reforms are also set to save over £1 billion by the end of next year.
Reeves announced an Autumn Budget for 30 October, with a full economic and fiscal forecast from the Office for Budget Responsibility.
Concluding, Reeves said: "Mr Speaker, the inheritance from the previous government is unforgiveable. I will never do that. I will restore economic stability. I will make the tough decisions. I will fix the foundations of our economy. So we can rebuild Britain. And make every part of our country better off."
In response to the speech, representative of the Welsh Government, Rebecca Evans MS, cabinet secretary for finance, constitution & cabinet office said: "I welcome the urgent action the new UK Government is taking to return economic stability and to take seriously the stewardship of the public finances entrusted to it. Over the last two years, there have been disputes and strikes over pay across the public sector as a result of the previous UK Government’s failure to invest in public services. This has been at a cost to the economy and to the day to day lives of people who rely on these services.
"Today, the Chancellor confirmed the steps the UK Government is taking to recognise the value of those working across the public sector. We are committed to working in social partnership with trade unions to achieve fair pay settlements in Wales which are affordable within our budget and respects the independent pay review body process."
Saffron Cordery, deputy chief executive, NHS Providers, said: “Trusts will be deeply concerned about further NHP delays. These projects can transform services for people after years of under-investment in the fabric of the NHS. Too many NHS buildings and facilities are falling to bits.
“Keeping patients safe is a daily struggle due to uncertainty about the NHP which promised 40 new hospitals in England by 2030 – a scheme which the government’s own spending watchdog said had not achieved good value for money. More than 100 trusts who applied to join the NHP were disappointed not to be awarded any funding at all.
“Soaring costs, on-hold building projects and the growing bill for patching up crumbling sites and facilities has seen some trusts with already stretched budgets having to spend more than £1million a month while delays put long-anticipated new buildings further beyond reach.
“The government must keep its manifesto pledge to deliver the NHP and it’s vital that the review happens in a timely way so that trusts get the clarity and certainty they desperately need.”
