Keir Starmer’s Cabinet members have received a caution against utilizing funds from the Treasury’s emergency reserves to finance salary increases for public sector workers. The government has imposed restrictions on the access to these reserve funds leading up to the upcoming Budget, describing the move as a necessary precaution.
In a communique sent to Cabinet officials by the Chief Secretary to the Treasury, James Murray, it was emphasized that any government department tapping into the £9 billion reserve funds will be obligated to reimburse the amount in the future under revised regulations. Notably, the directive explicitly prohibits using the funds for augmenting public sector wages.
The Prime Minister’s spokesperson disclosed that Murray outlined measures to restrict access to the Treasury’s reserves, emphasizing that such access will be strictly limited and not permitted for public sector pay increments. Ministers are now required to provide evidence of exploring all possible cost-saving avenues before considering a claim, illustrating a stringent yet judicious approach to government spending.
Last month, Rachel Reeves informed the Cabinet that access to reserve funds would be available only for genuinely unforeseen and unaffordable circumstances. The Chancellor is reportedly advocating for adherence to these guidelines to curb borrowing. During her recent address at the Labour conference in Liverpool, Reeves cautioned about challenging global economic conditions and the forthcoming trials for the government.
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