Assessment shows Britain is broke and broken, as Chancellor set to reveal the mess that populist politics has made of the country

Chancellor of the Exchequer Rachel Reeves MP will tomorrow (Monday 29 July) reveal the findings of the Treasury's assessment of the new government's spending inheritance, while setting out first steps to begin restoring stability to public finances.

The statement comes after former Chancellor Jeremy Hunt recently admitted the complete dishonesty of the Tory election campaign, confirming the party would not have cut taxes as they promised during the campaign due to the dire state of public finances. Hunt's remarks laid bare the dishonesty of the Tory campaign's dodgy election promises and the inheritance they've left the country.

Just three weeks into office, the new government has already begun the work of change, making good on its promises to be honest with the public and to restore economic stability, levelling with the country about the state of public services. The bonnet has been lifted on a broken NHS, the chronic shortage of teachers, a hollowed-out armed forces, record small boat crossings and destruction of our waterways – leading the Government to prepare itself for difficult decisions to start to rebuild the country.

The assessment will show that Britain is broke and broken - revealing the mess that populist politics has made of the economy and public services. It will show that the previous government made significant funding commitments for this financial year without knowing where the money would come from.

Pat McFadden MP, Chancellor of the Duchy of Lancaster, said:

“After fourteen years of Conservative failure, the Labour Party is calling time on the sticking plaster politics of populism.

“The electorate sent this changed Labour Party to government with a clear mandate to restore economic stability, grow the economy and build the homes we need.

“We will not shy away from being honest with the public about the reality of what we have inherited. We are calling time on the false promises that British people have had to put up with and we will do what it takes to fix Britain.”

Rachel Reeves will also commission an OBR forecast, confirm the timings of the next Budget and a multi-year Spending Review, setting out the path to restoring stability to the public finances, including committing to robust fiscal rules, as the government makes good on its promise to restore economic stability.

While the spending inheritance is a significant challenge, the Chancellor has been clear that the government needs to fix the foundations and make every part of the country better off. 

Across the public sector, the new government's assessment has shown that Britain is broke and broken. It includes:

Housing

Britain is struggling through the most acute housing crisis in living memory. For a generation living in insecure, cold and often low-quality rental accommodation, homeownership has become out of reach. 

The Government has inherited a planning system broken by short term and self-interested decisions that have obstructed the delivery of homes and have put a brake on our economy.

For 14 years the Conservative government failed to deliver the housing Britain needed and were rejected by the electorate as a result.

In the 12 months to March 2024, planning permission was granted for just 236,000 homes – a record low. And because of the damage done by choices made in the last parliament, the number of new homes building is expected to fall further to below 200,000 in the coming year.

Working people are facing huge challenges to find a safe and decent home to call their own. The prices of rented homes have skyrocketed.  A quarter of a century ago, the average home in England costs four times the average wage. Today it is more than eight times. 

Water

Britain's environment is at crisis point. Record levels of sewage are poisoning our rivers, lakes and seas. The previous Conservative government deliberately weakened regulation, whilst water bosses rewarded themselves over £26 million on bonuses since 2019 instead of investing in fixing our crumbling sewage system. 

The Conservatives have left Britain one of the most nature-depleted countries in the world, with a third of our wildlife species at risk of extinction, and our beautiful countryside in decline.

Confidence amongst farmers is at a record low threating Britain's food security and weakening rural growth. Farmers have been hit by spiralling energy prices and dodgy trade deals forcing over 12,000 out of business since 2010.

Health

The NHS is broken – and will require long term, fundamental reform.  

The NHS waiting list is still going up and now stands at 7.6 million. A third of cancer patients are waiting longer than two months for treatment, ambulance response times are still getting worse, and 1 in 4 people are waiting more than 4 hours in A&E. 

And this week an independent review of the health and social care regulator - the Care Quality Commission - found it was not fit for purpose and exposed failings of the institution that is supposed to identify and act on poor performance. One in every five health or social care providers have never received a rating, with one hospital not being inspected for up to a decade, putting patients' lives at risk.

Migration

The first half of this year saw record small boats crossings. This is the chaos this government has inherited, and it demonstrates the fact that Migration and Economic Development Partnership with Rwanda was failing as a deterrent.  

15,832 people have arrived in the UK so far in 2024. This is +9% compared to the same period in 2023 and +3% compared to the same period in 2022. 

Removals of failed asylum seekers have fallen by a third since 2010, whilst removals of foreign national offenders have fallen by a quarter. Only three per cent of those arriving on small boats since 2018 have been removed. The numbers are a damning indictment of a Tory Party that lost control of Britain's borders so badly that it put economic and national security at risk.  

Education

Too many children are not even getting to the classroom, with alarmingly high rates of severe and persistent absence.

The exclusion and suspension figures inherited show the massive scale of disruptive behaviour which has developed in schools in recent years. There were 787,000 suspensions in 2022/23 – the highest annual number and rate since current records started in 2006.

Education Policy Institute figures show that disadvantaged pupils are now over 19 months behind their peers by the time they sit their GCSEs, with the gap having increased at ages 11 and 16.

Defence

Britain's armed forces face serious challenges. Hollowed-out forces, procurement waste and neglected morale. 

Too many veterans feel like they can't access the services they deserve. 

There is a war in Europe after Putin's illegal invasion of Ukraine, conflict in the Middle East and global threats are increasing. 

The first priority of any government is to keep the country safe. This Government will make sure we are ready to defend ourselves, which is why we are reviewing the threats Britain faces, the capabilities needed to meet them, the state of UK armed forces and the resources available. It will ensure a ‘NATO-first' policy is at the heart of Britain's defence plans. 

Transport

Years of mismanagement and an antagonistic approach to industrial relations have led to unacceptably low performance and inefficiency across Britain's transport network.

Failure to negotiate a pay settlement for the railways has damaged the economy, costing £20 million a day for each day of strikes, and it is clear the privatisation model is failing passengers day in, day out. Between 1 June 2022 and 13 May 2024 there were 59 days of widespread disruption due to strikes on the rail network.

Over the past fourteen years, Britain's record of mismanaged infrastructure projects has been abysmal. According to the National Infrastructure commission, consenting times for projects have soared by 65% since 2012, up from 2.6 years to 4.2 years, with the costs of HS2 being allowed to spiral out of control. Billions of pounds of projects have been promised to communities across the country without the public finances to pay for them and this will never be done again.